Credit Card Debt Advice for the Young

The best credit card debt advice for young people is honest and straightforward. Some parents may try to save their child's credit by avoiding giving him or her a credit card altogether. While this will stop credit emergencies, it will also fail to teach lessons and build necessary credit for the future. Young people should learn to manage debt, not avoid it, with positive credit advice. 

When to Get a Credit Card

It is best to get a credit card once you have an income. Without an income, assuring you can meet your debts is very uncertain. Further, most lenders will be hesitant to extend a credit card to a young person without an income. However, once you have an income, it is wise to get a credit card as soon as possible. Even if you don't think you need credit, it is important to set yourself up with a good credit score, and this starts by taking a debt.

How to Select a Credit Card

Select cards primarily based on interest rates and financing fees. Cost should always be the number one consideration, but there are priorities to consider. Think about the card's purpose and determine if there is a specific line of credit that matches that purpose. For example, college students may need a card to survive the school year's costs, as for books and food. A great card will offer interest-only payments while the student is in school, giving him or her time to earn income on breaks and pay down the card.  

When to Use a Credit Card

If your goal is to build your credit, you have to use your card. Many people make the mistake of using a card for really big purchases. This can be a problem because, if you lack the cash to pay off the debt, financing fees can make the expense even higher. Instead, save cash for luxury purchases. Use your card for day-to-day items you can pay off immediately. This type of charge will keep your balance low and your payment record pristine.

How to Repay Debts

Each month, you will receive two quotes on your bill. The first will be a finance charge you must pay in order to avoid a late payment. The second quote is your payoff quote. To save the most money, pay off your bill every single month and prevent your interest from revolving. At times, this will not be possible. It is still wise to pay as much as you can. Aim to keep your balance below 10 percent of your credit limit to keep your score high. If you carry a balance over 10 percent for more than three months, stop spending on the card until you can reduce your balance.

Consequences of Unpaid Debts

If you are late on any bills by more than 30 days, your credit score report will keep a record of this problem for up to seven years. This can affect your ability to purchase a car, get a mortgage and even get a job. Do not miss payments. If you do, ensure that you make the payment before the bill goes past 90 days.

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