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A Credit Card Reality Check

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Have your parents ever told you that “cash is king?” This doesn’t mean that you should never use a credit card; rather,  if you don’t have the liquid capital to pay for an item that you aren’t prepared to finance and pay off over time, you shouldn’t buy it on credit.

Don’t be intimidated by credit cards.

Many people don’t trust themselves with cards because they know someone who has gotten themselves in trouble with late payments, or have not being able to come up with the money to make a payment.

Each time you pull out the plastic, just ask yourself: can I afford this with the money in my bank account? If the answer is ‘yes,’ you should pay with a card to build up good credit. Make it a point to pay off the card at the end of each month. If you make the deadline, there’s no need to stress.

Develop the right habits.

Responsibility is rewarded when it comes to credit cards. Make your payments on time, limit the number of cards you sign up for and be sure you can afford purchases you put on your card. National trends are showing that Millennials are  using cards more responsibly than their parents’ generation.

Maybe all of those warnings from parents who learned their lesson the hard way have scared their children into actually living within their means, for the most part.

Lead by example.

Most people get the majority of their financial advice from their parents. In many cases, parents will be completely honest about the lessons they’ve learned. If they abused credit and built up debt, they will warn you against making the same mistakes. If they managed their money effectively they will probably share advice about how they managed to keep the temptation to constantly use the card under control.

Try to establish habits from people in your life who are responsible with money. Get their advice and build a credit plan around positive financial influences.

Set Limits.

Wouldn’t it be nice if you could live like Cher from Clueless? But, the ability to go to the mall and buy anything everything you want, without a worry in the world, isn’t realistic for most people.  Ah, that would be the life.

We’re not saying that you shouldn’t spoil yourself from time to time.  Be sure to make a budget, save up and spend a day out shopping with your trusty card; just make sure your good habits and sense of responsibility are lingering in the back of your mind before your power shopping excursion.

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