• Why is credit important? Because without it you can’t make any major purchases, like cars, houses, boats, Starbucks franchises, etc. You can’t rent an apartment without having good credit. You can’t build a business without credit, because no credit means no loans, no products, no store, no income, no profit. You get the idea.
• The When: You know you’re ready to open a line of credit (think – credit card) when you have a steady income, a growing bank account, and feel in control of your spending habits. If you are still struggling to make ends meet each month with your monthly income, it probably isn’t the best time to get a credit card. If you aren’t able to pay your bills, it probably isn’t the best time to get a credit card. If you aren’t in control of your daily and weekly spending, you probably aren’t ready to get a credit card.
Credit cards are used for a purpose, but if used incorrectly, it can be destructive and dangerous for your future success.
>>> If any of these are you right now, don’t get a credit card. <<<
“Oh I’m sure I can pay this off sometime…”
“I can come up with the money later.”
“I can afford the minimum payments.”
“Everyone else has one so I need one too.”
>>> All things said that imply it’s the right time to get a credit card. <<<
“This will be the perfect way to pay my monthly bills.”
“I’ll keep my credit limit in my checking account at all times.”
“I don’t care what the APR is since I’ll be paying my bill every month.”
“This fits into my financial gameplan.”
• The How: To get started, you have to first apply for a credit card and get approved. Go online and do some homework on different credit cards to pick which one would be the best fit for you and your needs. I recommend Nerd Wallet to help compare the different benefits of each card and carrier.
• The Which: My personal favorite is Capital One Quicksilver as a first-time card. There are no annual fees, you get 1.5% cash back on everything, and the website is super user-friendly. It’s up to you what card you choose, so research will be your best friend.