Free money?

You are now old enough to get a credit card. Plenty of companies are willing to give you one. You can even get them with rewards. Best of all you don’t have the money to spend your money. There are many arguments for and against credit cards.

The first thing you need to decide is should you get a credit card. There are several pros and cons for getting a card.

Pro:
Don’t have to have money now
Get rewards
Build credit
More convenient than cash

Con:
Put yourself in dept
Hurt credit rating

You may have noticed that a pro is build credit, while a con is hurt credit. A credit card is what you make it. If you pay you balance if it will help build your credit rating. If you don’t pay your balance it will hurt your credit rating. It is really way more complicated that, but that is basically how it works. Your credit rating is extremely important. You might not care right now, but you will in the future. It becomes important when you want to go buy a house or a car.

I personally love credit cards. I only have two though. Having two many can hurt your credit as well. I use it for the convince factor. That way I don’t need cash. Also I get rewards from my card. I use to knowing full well that I have the money to pay for the bill, but I rather get rewards. At the end of every month, I pay the bill off in full.

I don’t think someone should use a credit card if you don’t have the money to pay off the bill. I suggest that instead you either just use cash or use a debit card to access the money you do have. If you don’t pay your bill off they charge you interest on the balance which means the next month you will owe even more money even if you did not charge anything else.

If you decide to get a card, get a card from a major bank such as Chase or Citi. Don’t bother to get one from a local bank because they will not offer you things that the big ones will. The local banks will most likely not offer you rewards. Also they will not offer you as high or a limit or one that automatically goes up the longer you have been with them.