So, the next area of our financial lives that leaves the most impact is our credit. Credit is a lot like a GPA - you can bring it down in a matter of minutes and spend the entire remainder of your life building it back up. Establishing GOOD credit now sets us up for a sound financial future later. Credit is what helps to get a car, a house... anything linked to truth, basically. Now is the time to work on building up that score.
A couple of tips from my personal file:
My first credit car was (and I still have it) my Old Navy card. I had heard from others that it was a good idea to get a department store credit card first to establish good credit. I never charge more than $50 on it at a time, and the low balance makes it easy to pay off. Also, I get emails on sales and Bucks Back certificates every once in a while.
After about a year, I moved up to a real credit card. I went to citicards.com and filled out an evaluation to find out the best card for me. I chose a card that gives me cash back on every purchase. After I accumulate $50, I am eligible to get that money back.
On that note, I would like to give you a little advice:
- Pay your card off every month (if you can). If not, always pay more than the minimum. Paying your cards off helps to establish a solid score and makes you a good credit risk.
- Choose a card that benefits your lifestyle. If you are a jetsetter, find a card that gives you frequent flyer miles. Or, if you like having something to show for your purchases, the bucks back benefit is a great option.
- You really only need one card. Sure, a store card is nice, but nowadays, you can sign up on the store website for promotions and deals. Get one major card and stick with it.
For some "professional" advice, check out the Bank Rate site and find out which type of card is right for you.
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