While credit card debt can get people into all sorts of trouble, the truth is that if you’re financially responsible, having a card or two can actually be a smart move—especially if you’re able to pay down the balance in full each month.
For one thing, having a history of creditworthiness can help you get loans like car loans and mortgages. Without a credit history, it can be hard for lenders to know whether you’re a responsible person to lend money to. A good credit score shows that you’re good about making your payments on time, not borrowing too much, and keeping your financial house in order.
For another, lots of cards offer some pretty cool benefits like cash back, mileage points, a percentage off store purchases, and other rewards which, as long as you’re paying down the balance each month, is basically free money for buying the things you were already going to buy anyway.
The question is: which card do you go for?
There are a million and one card companies out there, each one with a million and one different kinds of cards to offer. Over the years, I’ve gotten mailings trying to get me to sign up for cards with my college’s name on them (I’m a proud alum, but not that proud!), cards I can customize with my own images (it would totally be BD and LD), and all sorts of other things that just don’t seem appealing enough to me.
What I go for, personally, is cash back and percentages off. I especially love my Target and Kohl’s cards, because they let me get great discounts on things (groceries, household stuff, clothes) I’d be buying anyway. I just make sure I don’t buy any more than I have budgeted for so I can pay off the balance when the bill comes in. (Otherwise, those savings would be lost in the interest that would build up.) My friend recently got a card from Bankwest and is really happy with it. It all depends on what you’re looking for.
How do you decide? With so many credit card choices out there, how you determine which is the best fit for you?
photo credit: The.Comedian