If you use credit wisely, you could save hundreds of thousands of dollars over your lifetime. It can help you get and keep more, and it can also help you save money for the future. Even if you have bad credit, you can still get the same benefits if you work to improve it and start using credit wisely. Here are some things you can do to help you reach these goals.
- Using Credit: Using credit safely means not taking on more than you can safely handle. You shouldn't have more debt than you can pay off in one year. And you shouldn't keep getting new lines of credit. It makes sense to get credit cards with lower interest rates, but you should also close cards with higher rates. Some people think it's good to have a lot of credit, but that's not true. Having too much credit is also bad.
- Using credit: When you use credit, you should avoid buying things that you don't need or that aren't worth the price. Remember that you will pay not only the price on the sticker, but also the finance charges that come with it. The 24 hour rule is a good way to do this. If you want to buy one thing that costs more than, say, $200, you have to wait 24 hours before you can do so. This gives you time to really think about whether or not it's a good idea.
- Keep track of everything: If you start to fall behind on your credit, make sure to take your credit cards and put them in the freezer or the back of a drawer so you can't use them. Pay your bills on time and in full every month. Don't get caught with late fees and charges.
You should have some credit, but you should only take on what you can handle. This is a smart way to use credit. And in this world, you do need credit to buy a home, a car, or even some jobs. You need credit, but you need to make sure you know how to handle it.
