Not suggesting you get Discover. Just had this picture on deck.
I recently had a conversation with someone near and dear to me about credit cards. The conversation started innocently enough when I asked how using her first credit card was going? She flippantly mentioned she’d paid the minimums and I gasped. What? Why?! She seemed flummoxed by my questions. She asked why her lender would put for a minimum payment on her statement if that isn’t what they wanted? I walked her through interest rates, minimum payments and how lenders are essentially trying to put you in debt. Does that sound cynical? It’s true.
In response to her conundrum, I decided to write an extensive guide on how to use a credit card for beginner’s on MagnifyMoney.com, because we make credit card recommendations there and it seems important to have this information available to any credit card rookies (and even some experienced users).
So, you want to open a credit card? It’s a good idea – most of the time.
Opening a credit card provides a simple way to establish and build credit history. Yes, certain credit cards can earn users rewards for cash back, travel miles, and redemption points, but the road to reward chasing is littered with people who slipped into credit card debt. Beware of your budget and your personality if you elect to pursue the path of reward chasing.
If you have trouble paying bills on time, saying no to purchases you can’t afford or just sense a credit card may not be a good idea for you – then trust your gut. While a credit card is a great tool to build financial health, it can also lead to painful consumer debt when used improperly.
Still think you’re ready to take on the responsibility of owning a credit card? Then let’s walk through how to select, understand, apply and manage your credit card.
Step One: Select your type of credit card
Credit cards were not made equal and we’re not just talking in terms of interest rates and rewards. Your unique situation will determine which credit card you should (and could) apply for.
Click on over to MagnifyMoney to read the four steps for credit card rookies.
[Discover it image from Flickr]