Wouldn’t we all like a little more money at just the swipe of a piece of plastic? Don’t we all stare longingly at those promises of credit limits greater than our savings account and shiny plastic shopping sprees? We have also been told time and time again that credit cards are the devil. We’ve all heard horror stories about college students getting in over their head with a credit card and ending up selling their soul to pay off their debt. However, credit cards are sometimes a necessary evil so that we, as millennials, can begin to build credit, so that someday we’ll be able to buy a car or a house. How soon is too soon to get a credit card? There is no magic age where suddenly you become mature and ready to handle the responsibilities of debt, but there are a few signs you might be ready for a credit card.
You have steady income
Don’t spend money you don’t have. If you don’t have a steady income and know when your next paycheck is going to be direct deposited, then you aren’t ready for a credit card. Credit cards are not meant to serve as your paycheck. Having a steady income most likely means you have a steady job, and therefore can reasonably expect to pay back any debt you incur on said credit card you want to line your wallet with. If you don’t know when you’re going to get your next paycheck, or how much it is going to be, then you probably don’t know when you’re going to pay your credit card bill next and that is not a good sign.
You know how to budget
A good budget goes hand in hand with a steady income, and is a necessity if you are going to commit to a credit card. You have to learn when to spend, when to save, and what you can reasonably afford to pay. You should never, under any circumstances, spend more than you have, even if your credit company says that the sky is the limit. Set a budget for the month and don’t forget it. Your credit card may be willing to let you go over that budget, but you should be able to stick to the budget you set every month. If you’ve never made a budget, or stuck to one, that is probably something to try before you sign your life away to Visa.
You know how debt works
There is no such thing as a free lunch, even if you put it on your credit card. Eventually, that debt will catch up to you. If you realize that you’ll have to pay that debt back, and then some, if you let it accumulate, then you might be ready for a credit card. If you think that the credit card bills will just disappear magically, you’ve got another thing coming, and you are definitely not ready for such responsibilities. If you think everything Bernie Sanders says is economically unsound, that is a good start. Know the interest rates you’re going to be facing before you commit to any credit card, and you’ll be a lot happier, and wealthier, in the future.
You pay your own bills
Another step towards real adulthood is paying your own bills, and that includes what will one day be your credit card bill. People who pay their own bills are much more cognizant of where their money is going, and therefore and less likely to want to throw their own money away. If you are mature enough to pay your own bills that means you have the ability to pay those bills, and that you understand the importance of those bills. Before you think about signing up for a credit card, think about your history of bill payment and let that guide your decision.
You know your own limits
The hardest part about having a credit card is forgetting that you have one. Sometimes, that is exactly what needs to be done. Credit cards seem like great fun, and they are a surefire way to make you feel like an adult, but they carry a heavy load of responsibility with them. Even if you are only making two thousand dollars a month, a credit card company will gladly give you a five thousand dollar limit. The key to being truly ready for a credit card is knowing when to stop spending, when to put the credit card away, and when to forget it even exists. If you’re anything like me, you love to shop and cannot say no to a good sale. This is where credit cards can get you in trouble, so know your personal limits. Know how much debt you are willing to go in for a limited edition Lilly Pulitzer shift. Know how much money you’ll be able to put towards your credit card bill each month.
Best of luck credit card hunting!!