Don’t be dumb…like me. I have two credit cards. (not the dumb part). One I faithfully used and paid for on time every month. The other card was also faithfully used and paid for on time every month until it wasn’t. 

I swear on whatever book, person, or thing that will make you believe me that I paid that credit card, but I didn’t. So for two years, I have had a credit card bill of $300…with interest. It has gone up. But that is beside the point (not really, I don’t like talking about it). 

The lesson of this soul-crushing story is that A.) my credit is currently a work in progress (i.e., it’s absolute and utter trash) B.) Even when you think you paid your bills, please make sure that they got paid and that you don’t take it for granted. 

Learn from my horrible life-altering dumb mistake. Or don’t. And suffer in this infernal “I will never be approved for anything in my life” hell that I live in now. 

Credit is not free money. It’s borrowed money that you need to pay back, or you will owe even more money. Think of it as a library. You can check the money out but need to return it, and if you are late, then you are going to owe some more money. Check the book in and return it promptly. Seems easy enough, right? Wrong!

With a credit card comes an unprecedented sense of freedom. You can now technically buy that one thing you have always wanted. Don’t let the siren seduce you. It’s a trap. So how can you make sure that you don’t let the freedom go to your head? Here are some rules about credit cards.

Never spend more than the limit of your card

Credit Cards have limits. Just because it says you have access to $2,000 doesn’t mean you should go out and spend $2,000. And if you go over your limit, then your credit score is going to take a hit. 

Never spend more than you can pay off at the end of the month

You need to pay off your credit card bill every month. Don’t bite off more than you can chew. At the end of the day, if you don’t pay off the totality of your card, then you will owe more money. Interest sucks, but it’s part of the game. 

Pay your bill every month ON TIME

Look, why pay more than is necessary? It seems like an obvious thing to emphasize, but so many people tend to think otherwise. Pay on time and pay off all that you have to and you won’t be more broke than you already are. 

Limit the number of credit cards

You don’t need ten credit cards. Honestly, you don’t need more than two. All of those stores that offer credit cards? You don’t need them. Stick with the basics. Take it slow and build credit. 

There are a few exceptions to this.

Let’s say you need to buy some new furniture, like a couch or dinner table with chairs. You go to pay for all the stuff and as you’re checking out the retail worker says you can save 20% on your purchase if you open a credit card with them, on top of interest free payments for the first 6 months. It might be wise to consider this option ONLY IF you can pay off everything in those first 6 months. 

Don’t put friends on your credit line

This may go without saying for some of you but here it goes anyways. I know you love and care about your friends dearly, but do NOT make them your financial responsibility. 

Haggle your interest rate

The big scary number that everyone is worried about is negotiable. Call the number on your paperwork and see what you can do. Even if it’s just a small amount, it can make all the difference. The key being that your credit score needs to be better than when you first got the card. If you can show that you are good with your credit, most credit card companies will work with you on a better deal. 

Watch out for annual fees

Credit cards, especially the ones that have rewards programs, have annual fees. A $100 annual fee in exchange for a discount at a specific store might not be worth it. So keep an eye out for the fees and figure out what works and doesn’t work for you. 

Credit is not limited to credit cards

Credit gives the financial power to buy the things you need now with a promise of paying for it later. 

Good credit will get you a loan for a car, house, or better deals on insurance, or even let you rent an apartment. Building credit is easy. Pay your bill on time and in full every month. The key to building good credit is getting into good habits early on and sticking to them. 

Building credit takes time, but stick with it, and it will pay off in the long run. 

Dive a little deeper into credit, check out Credit 101.

Do you have any credit card horror stories?

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