24: Credit Cards: The Good, The Bad + The Ugly
Which benefits are important to you? Travel? Cash back? No annual fee? Low-interest rate. Also, check out The Points guy for credit card tips. Other cards that offer benefits to meet your needs: Costco card, Fidelity for cash back, or your college’s alumni association.
Grace period. The time between the end of your billing cycle and the date your payment is due. Aim for 28 days.
Pay more than the minimum. For example: If you owe $1,000 and just pay the minimum, it’ll take 9 years to pay it off and you’ll generate almost $2,000 in interest on just the $1,000 balance! TIP - every time you use your credit card, keep track of it on a notes app on your phone. Just seeing the charges could motivate you to spend less.… The average interest rate is 16.3% so make sure you are paying your balance in full, so not to pay interest. Monthly late fees range from $28 to $39 per month!
Does everyone need a credit card? Yes because it’s the main thing that builds our credit history which is how we move forward in our financial life. It’s how we rent an apartment on our own, get a mortgage, refinance, and even get a job for some companies. Debit cards don’t build credit. Start small, just put $50 per month on your credit card and pay it off. Get a card in YOUR own name.
Benefits of credit cards. They can protect against fraud, have no foreign transaction fees, earn rewards, you don’t have to carry cash, and helps track spending. For example: if your card gets stolen, they will usually reverse the fraud charges.