SHOULD YOU USE A CREDIT CARD?
Posted on: May. 06, 2017 in Credit, Debt, Money

It seems like the American way of life requires you to have a credit card. Shopping online, traveling, and many other services are difficult, if not impossible, if you don’t have one. But with all the information warning people about the dangers of credit cards, it’s understandable that many aren’t sure what to do. Should you However, use one or not?

Having a credit card can help you build a credit history. And you’ll need that if you want to apply for a mortgage. The longer your history, the more information a lender has about you and that will help them to make a decision on whether or not to approve your loan. Even smaller purchases like a car, or other types of personal loans, will be easier to obtain with a good credit history. You need credit to get credit. In other words, using a credit card wisely to build a strong history can earn you more borrowing and buying power in the future.

But what about debt? Millions of Americans struggle with credit card debt. A common misperception is that this just the result of living beyond one’s means. However, many people face hardships like losing a job or getting sick that can cause them to accumulate debt. It’s important to spend wisely and borrow carefully during the times when you can so that you’ll be better prepared for the bumps in the road. Using a credit card to purchase things you know you can’t afford and you don’t need them is definitely a dangerous habit.

It’s best if you can use your card regularly and then pay it off in full each month. This way you’re building a history but not accumulating debt. You’ll also avoid paying interest charges. If you must carry a balance, try to pay it off as quickly as you can. Do your best to keep the amount you owe under 30% of the total available limit. Anything over that amount can begin to lower your credit score.

Having access to credit can be the security net you need when things go haywire. Protecting your credit and your ability to obtain it is very important. But if you don’t use credit, you’ll likely have a harder time in the future. Use them, but use them carefully.

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