Crazy Credit!!

[I am speaking mainly to my friends that are my age as opposed to the adults that I know. I'm also not trying to step on anyone's toes, just bringing up an issue I've noticed.]


I know some people who are aggressively against credit cards. They think they are the most awful thing and can destroy your life. They CAN destroy your life, but this sort of mentality usually comes from someone who ignorantly misused a credit card.

Using self control and good money management, a credit card can be an incredible asset and is almost absolutely necessary in order to have good credit. This is my credit blog! I just wanted to tell you how Lewis and I work it out, just as an example (although not an absolute suggestion). You have to choose what is best for you, I just hate when people maintain a really negative view of credit cards because their parents were in debt. You don't have to use a credit card like that! This is how we do it, but investigate for yourself and do what is best for you!!



Lewis and I use our credit cards for almost everything. We don't use cash or checks unless absolutely necessary. But we don't spend above our budget. This way, we pay off our credit cards completely upon every due date. We never carry a balance into the next month, therefore never paying interest. If you use your credit card like cash and only spend what you can afford to pay off that month, your credit score will rise and very quickly.

Both of us have high credit scores. (I don't know the etiquette on that kind of thing, so I'm not going to say specifically what they are, but from what I've heard I think Lewis' is really high. Mine is only 20 points behind his, but I've only had credit for like a year and a half or something.) But anyway, because our credit scores are high, we never have to pay a deposit or anything for a cell phone or utility company when setting up new service, we got approved for a lower mortgage loan rate than we would have gotten otherwise, and we are easily approved for housing or car purchases (although we have paid in full up front for both our cars, so we don't pay interest on those either). Now, I will admit that Lewis' dad was an accountant for the Kentucky State Government, so Lewis' financial planning is very meticulous and budgeted. Not everyone comes from that sort of background, but there are classes you can take and there is lots of information you can read to become more educated in financial planning!



I do understand that some people have a problem with spending. Having a $4,000 limit on a credit card when you are in college can be a huge problem for some people. I did have a friend who I think had some sort of problem. He literally could not keep himself from spending to the limit on his credit card. If you are like this, then definitely avoid credit cards. But for those of you who have good self-control and are just afraid of it because your parents were thousands and thousands of dollars in debt, you don't have to be like your parents!! It will be okay!!



Either way, I just want to encourage everyone to learn as much as you can and to practice self-control before shutting out credit cards or loans completely. They can be a really great asset in our culture today.

Here are some sites about credit planning and money management:

Money Matters
Smart About Money
CNN - 5 Tips for Cleaning up your Credit

There are also classes at local colleges that teach money management. I know at UK there is a FAM 251 class - Personal and Family Finance and at BCTCS there is a MGT 120 class - Personal Finance.