You're finally out in the real world and you probably want to buy a car or a house of your own. You might think that it would be easy, considering you don't have any bad credit; but, you don't have any good credit either. You don't have any credit history at all - period. You might think that this wouldn't work against you, but it will.
Future creditors need to see some kind of record that reflects your ability to pay back a loan. Without that many places are reluctant to give you a loan for a car or a house. So what is the best way to begin to establish your credit? You will have to start with getting a credit card and making a few purchases on that to show that you are capable of paying back a loan in a timely manner. When deciding which credit card to start with, you should sit down and evaluate some things about yourself.
For instance, are you someone who procrastinates? Do you have steady income that will allow you to pay the bills? Why do you want a credit card in the first place? It is very important to be honest with yourself when you answer these questions because it is easy to get into a hole that you can't crawl out from. Even if you feel like you are the most irresponsible person on earth, but you still want a credit card, a good one to get is the American Express green card. The Amex card has to be paid off every month, and you may be willing to spend less if you know that there is not going to be a balance you can carry over. Trying to find the right credit card for you can be a confusing process. You have to take into consideration the APR, annual fees and a multitude of hidden charges.
The best place to start is with the APR and compare those. Many people gloss over the fine print because at first glance it seems like a nuisance to wade through. Try to read it anyway.
You will find that there is information in there that will save you money in the long run. Credit companies don't want to hear "I didn't know", not when they can point back to the small print and tell you it was right there when you signed your name to the agreement. When you use your first credit card there are some rules that you should follow.
You should always shred your receipts, and also shred any credit card offers that you are not considering. Do not ever give your credit card number over the phone unless you are the one who initiated the phone call to the company that you are ordering things from, or trying to get a bill paid. Keep the customer service numbers of all of your credit cards in a safe place. Sometimes companies will send you a new card and it will get lost in the mail, an automated system will ask for your information before it will let you proceed, however, if you don't have a customer service number, you will have to wait until your next bill comes in. You would think that calling the store would help, but incompetence runs rampant in all parts of the world.
You may be able to put off getting a credit card for a little while, but in the end there is no avoiding it. The only thing you can do is know your limits and not spend outside of it. With a credit card it is easy to say you'll buy now and worry about the bill later, but you have to make sure you have to money to pay the bill when it does come in.
John Edmond runs Credit Card Debt where you can read many more articles on and for the latest information on credit card debt checkout the blog.
