Why You Need a Credit Card Now
So you want to talk about finances…
No?
Well, I get it, I didn’t want to either.
Finances don’t sound fun…but when you are purchasing a new iPad, sunglasses, or concert tickets with the cashback you earned, you might change your mind.
Finances can seem very scary at first, and honestly, sometimes they are. Credit card scores stay on your record, student debt can hold you back from large purchases, and the stock market can be VERY intimidating. That’s why you start small.
I’m sure that at this point you have a debit card of some kind. You probably have a basic understanding of how these cards work: you get money, the money goes on the card, you swipe the card, and the money disappears. Well, credit cards are similar if you remember one thing… you have to pay the money back!
Why?
So, you might wonder, what IS the point of getting a credit card? Credit cards provide you with an essential for life: a credit score. Dreaming of purchasing a house? Leasing an apartment? A new car? Those things practically require a credit score to even be considered. While those things might still be far away, it is important to start now, not a month before you want to purchase a house.
Getting Started
Starting is simple. Personally, I have the Discover it Student Cash Back card. I’ve had this card for roughly 3 months, and I have already built up a good credit score, simply by spending money and paying it back. With this card, you can earn 5% back on specific purchases. For example, in the last three months, I got 5% cashback on all online purchases… including apple pay! I always intended to spend this money, but I ended up getting paid for it. Additionally, all other purchases come with a 1% cashback rate. While this is not the only credit card available, I like that it is geared toward students, and the 5% categories change every 3 months. I did quite a bit of research before choosing my card, and I could not be happier with my shiny, sleek, bubblegum pink card.
Even better than the bright pink card and cashback, is the setup for the credit card. For the Discover card, no credit score is required, just basic info like your birthday, college, social security, and monthly housing or rent. Most other student cards require the same basic info. Bills can be sent to your university address, or you can opt for paperless bills as I did. I have control of all my finances in the palm of my hand…my iPhone. I can pay my monthly bill through the app, see my credit score for free, and freeze the account with just a few clicks.
Be Responsible
Having said all of this, the most important thing to remember before getting your credit card is to be responsible. Just because the money is not coming from your debit card, it is very important to remember to pay your bills on time. If you think you will struggle to remember, you can easily set your notifications in the app to remind you or set an alert in your calendar. The only way to make a credit card use is to pay it in full each month on or before the due date, hence why you should only spend what you can afford. If you pay your bill on time and in full each time, you will avoid paying interest. A credit card is not free money and as fun as swiping a pretty-colored card is, it comes with a price. And do NOT forget to read the fine print…no matter how boring it might be, you are signing a contract.
While it might seem daunting at first, I encourage you to start now. Your future self will thank you. When you are ready to get your first place or start paying your own phone bill, you will be beyond thankful that you started early. Who knows? Maybe you’ll even get a discount for having a great credit score!
Resources
This website was a great resource when I was searching for which card would work best for me: