Thoughts on Debt

Credit seems to be one of those things damned if you do, damned if you don’t. What are the right choices? Is it a good idea to have a credit card? Do I need one?

Credit unfortunately is a necessary demon. You must obtain credit and use it wisely. If you purchase something on your credit card it is a good idea to spread out the payment of that item over the next 3 months and then pay it off. Then do the same thing a few months later. If you can’t afford something than don’t buy it. This is the rule. In other words, credit cards are not something that you should use to pay for something that you really can’t afford. If you do this, you will either wind up paying so much in interest that the item will cost 3x what it actually did, or you may fall into a trap of not being able to pay your bills on time, which could put a serious dent in your credit. Credit cards unfortunately are necessary, as getting them will afford you the opportunity to build your credit score and establish good credit for a car loan or mortgage in the future. One of the biggest ways to have wealth and good financial standing is to have an excellent credit rating and to own homes and land. These are how anyone who is anybody has obtained their wealth and if you don’t believe me than find someone that you know who is financially over the top, and they will tell you credit and real estate are their 2 most important and valuable assets.

Go ahead and apply for a few different cards. Try getting one gas card, one store card, one American Express card, and a Master Card or a Visa. If you can do this without racking up debt and get the items paid off in about 2 or 3 months than you are set. With the exception of Amex the other cards won’t really improve your credit rating if you pay the balance in full every month, that is why we suggest American Express as one of your primary cards. It is a big name card, but needs to be paid monthly, so you can’t get too far in over your head. Use your credit wisely and it will serve you well, don’t and you will be forever sorry.

Tags: American Express, Amex, car loan, Credit, credit card, credit cards, credit rating, establish good credit, excellent credit rating, good credit, Master Card, mortgage, Visa