One of the goals I set for 2016 is to get a credit card. But what do I know about them? Zero. A big zero. I started doing research on credit cards and all important information that I need to know to get one and start using.
But to make things short, a credit card is this little piece of plastic issued to users as a payment system. It costs absolutely nothing if you pay in time, but many users get to pay fees as they pay in late or overstep their balance. There are lots of advantages of credit cards: you can save more money by using them, you can track all your payments and expenses, you don’t need to carry around cash and etc. But this all comes if you are using your credit card responsibly. So make sure to educate yourself all about them before getting one and make good decisions once you get yourself a credit card.
And there is a lot of information about them, I tell you! You can get lost in all of it. So, I decided to make things easier and asked fellow bloggers any tips or recommendations they have for credit-card-virgins out there. Here’s what they had to say:
SARAH FROM THE SARAH STORY | “Don’t apply for loads of credit cards. Save money by paying off in full each month. And put all your spending on credit cards if they have bonuses like air miles (again, pay off at the end of the month)”
JOSIE FROM JOSIEVICTORIAA | “A tip I would give is to get one early so you can use it on little things and practice using it and paying it off (when it’s only little bits of money), and to definitely (if you’re likely to forget) set up a direct debit so that either the minimum, or the full amount, if possible, get’s paid off every month when it’s due. Since statements and things are online now, I would definitely forget to pay it off and get into loads of trouble!! Another good this is that certain banks give a certain percentage cash back when using certain shops and things so that’s worth checking out – especially for students!”
CATERINA FROM KATE/IDOSCOPE | I don’t have many tips to give you about credit cards just random ones that anyhow I find very practical. The main difference for me between credit cards and debit cards is that the payment in credit cards happens after some time. So depending on your bank account, money spent will be withdrawn from your account the following month. For me it is a nightmare, I couldn’t remember everything so I end up writing down the list of my last purchases on a notebook. I can suggest that you could also simply write it in a note on your phone or I am sure there are some apps of reminders and lists that will do. A great thing about credit cards is that you don’t to remember a pin code every time you pay. Hope this may help.
CHARLOTTE FROM A LIFE OF A CHARLOTTE | Credit cards may sound like a bad idea, but as long as you’re careful, they can be great. Future thinking is what got me applying for a credit card as it’s the number one way to boost your credit score, which is a necessity when looking at mortgages. I made sure that the interest rate, should I ever need it, wouldn’t be sky high, and I made sure it was a limit I could stick to and pay off every month after a pay day. There are plenty of Credit cards that offer you lots of different options, so be sure to do your research and get the best that suits you, and your needs. I got a Tesco credit card, as it meant I could collect points on all my spending, and put those points to holidays over the year – Bonus!
BRITTANY FROM BACKROADS & BINKIES | If you have a child who you have set up a 529 plan for, then you probably know about using Upromise to gather some extra funds. What you may not know is that offers a Upromise credit card to get to your goals faster. This is our #1 card, and we use it to pay for everything. We pay our bills, do our shopping, and everything in between with this card and pay it off at the end of the month. Last month alone an extra $90 in her account. It may not seem like a ton but it will add up and grow right along with their 529 plan.
Another card I really love is my target red debit card. Unlike your typical red card (which we have and do use occasionally) this card is linked directly to your checking account. You set up a pin and use it just like your debit card but receive the 5% off perk that comes with a red card. This card also makes it so you don’t even have to save a receipt for returns because they can just pull it up from your card, which let’s face it that in itself is enough reason to get the card. And avoid department store cards at all cost. A lot of times you get sucked into it because they offer more and bigger discounts to card holders, however their interest rates are higher and It usually doesn’t pay off.
MELANIE FROM MELANIE GRACE JONES | I myself got a credit card when I was 23. I was living at home with my mum and sister in London paying minimum rent and expenses. I was trying to save up and buy a house with my boyfriend and was advised to get a credit card to show I had good credit. One annoying thing about being seen as a desired candidate for mortgages was that I needed debt! My plan was to spend no more than £50 a month and pay it back right away. This would show I paid on time without issue and I set myself a budget of £50 because it didn’t need to be more.
BUT! Once that card is in your hand, you suddenly see it as “free money” and I was soon spending outside my means. It didn’t matter if I was broke a week before payday – I had my credit card to see me through and suddenly saying no to myself wasn’t an option. It took two years to realise I was in debt to the credit card people ( Yep, that long!) I realised I was paying a chunk of my wage every month to pay only part off. When I looked at my statements, I realised it was all on ‘luxury’ goods I REALLY DIDN’T NEED. it made me thoughtless to spending! If I wanted a bag or a new top – I would get it without question – I’ll just put it on the credit card. The most surprising thing to me was the less I paid back each month, the MORE credit I was given. My credit went from £1,000 to £5,000 !! It was ME who had to tell the company to cap it and not give me more. I’m not saying that all will fall into this trap but I will say it’s really easy to. I had never had bad debt previously and got completely sucked in.
Having a credit card though does have its perks. It’s a quick way to borrow money interest-free! If you want to buy something expensive (a car for example) and don’t have all the funds up front. So long as you can afford the monthly repayments and don’t continue to spend on it. Another great perk is consumer protection – if anything goes wrong, you will get your money back ( e.g paying for flights and the company goes into administration) which you wouldn’t get paying with a Debit Card. If you are thinking about getting a credit card, make sure it’s for the RIGHT reason and you are sure you can afford and stick to paying it off. Getting into debt isn’t worth it for the sake of having a new bag that you will get bored of in a week. So, my top tips for getting a credit card would be:
- Ask yourself if you really need it.
- Check the fees and interest rate… Make sure you can afford to pay the monthly repayments.
- Don’t apply for more credit than you need.
- See it as short term and not long term.
- DO NOT RELY ON IT!
This post is also a collaboration with lovely Olivia Nash, so check out her post in which she shares some great tips if you are thinking of applying for credit card and the reason why you should use it and gives you all the pros and cons of a credit card for the first time users. I am sure you will find it helpful!
There is also a YouTube channel called Credit Card Insider that makes videos about credit cards for those like me, who have no idea what they are getting themselves into. I really recommend checking it out, there is a lot of good information and advice about these little cards and how to save money with them. And if you are more into reading than watching videos then they also have a website with all the answers to the questions you might have about them. If you’re studying at college or university, they even have a section about student credit cards here.
I hope you found this post helpful in some way. If not, I tried! Don’t forget to give some love to these beautiful ladies that made time in their day and shared their tips. They are all wonderful and amazing bloggers. Also, thank you for a huge support on my latest post about impressing men and other people. I am so happy you all actually enjoyed it and related in some way!
Do you have any tips or things you wished you knew sooner regarding credit cards?