Do you remember going to the store with your parents, and
instead of paying with cash they swipe a plastic card? Or do you ever recall
your parents discussing their credit scores or credit debt? At a young age we
come to understand what credit is, but as we emerge into young adulthood it is
crucial to understand what credit means for future finances.
According
to an article from the Huffington Post, it is important to establish good
credit, especially at such an early stage in life when it is easy to make poor
financial decisions. Jason Alderman expresses what problems could come from
having bad credit such as: higher interest rates, especially on loans, certain
jobs will disqualify you for poor credit, and it could make it difficult to
rent an apartment. He also states some actions you can take to help manage your
funds and credit use.
Some
tips for managing your funds according to Jason Alderman are: Make sure you do
not make purchases with checks or debit cards unless the balance will cover the
fees. Ask your bank to send you texts or
email alerts whenever your balance drops below a crucial level- this way you
will be less likely to overdraw your account. Start out with a secured credit
card. This credit card will be linked to an account that you deposit money
into, making it easier to pay the balance and keep a good credit score. And
finally, if you do qualify for an unsecured credit card, pay the minimum
balance on time and try to pay off the full balance each month.
Credit
use is an extremely important topic for emerging young adults. We are at a time
in our lives where we are becoming responsible for our own finances and it is
important not to get in over our heads or in debt. Having a good credit score
will not only help you now, but can make your life much easier for the future.
READERS,
what do you think?
1. Do you think at this point in your life you could
handle having an unsecured credit card? Why?
2. What steps will you take to ensure a safe credit
score?
*Kelsey Meeks is an undergraduate student with UK Department of Family Sciences
References
Alderman, J. (2012, September 12). Highschool grads need
to understand credit. Huffington post. Retrieved from http://www.huffingtonpost.com/jason-alderman/high-school-grads-need-to_b_1877445.html
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