What advice would you give a young person about using credit cards?

Pretend you are talking to a young person, age 18, who has received his or her first credit card. What advice would you give them about using the card and about using credit in general. Asked by -layyla- 51 months ago Similar questions: advice give young person credit cards Business > Financial Services.

Similar questions: advice give young person credit cards.

Don't use them. " I would say, "Don't use them. " I would say: Credit card companies are consciously trying to force you into an economic hole, in the meantime sucking your blood until you are dry.

They do not want you to use them conscientiously, and to pay off your debt. They want you to pay late fees, high interest, and to stay in debt forever. That is how they make money.So if you (the teen) want to be a patsy for manipulative corporate types who think you are stupid, then use that credit card.

(If the teen was pretty sharp, I might show them how credit card payments are computed, how long it would take to pay off a balance if they make no additional purchases, and the total amount they would pay for that $100 cell phone. There are various calculators on the web for that.) But a credit card is good to have for emergencies. So if you can, get one with a credit limit of perhaps $500 to $1000, so you can't get into deep trouble.

If they offer a higher limit "Because of your outstanding credit record," turn it down.(And don't be flattered. They will give credit to any patsy who they think they can bleed dry. ) And use it ONLY in emergencies.

You can look for low interest rates, but that shouldn't matter much, because you aren't going to maintain a balance on them anyway. And if you cannot pay off the balance immediately, always pay more, a lot more, than the minimum payment (which is designed to draw out your payments for as long as possible. ) For routine purchases you can use a debit card, which draws money directly out of your checking account.

When there is no more money, the card stops working. If you can avoid using credit cards, and if you can somehow bear to live without a fancy new car, you will avoid the two great fiscal traps that teenagers fall into. Most teens manage to get through those years without permanent damage.

If they don't, it is generally because of three things: addiction to tobacco, substance abuse or alcoholism, and misuse of credit cards. I have known several teenagers who were considering bankruptcy, just because of their credit card debt. If they declared bankruptcy, they would have real trouble getting any kind of credit, like for buying a house, a car, getting a new credit card, or even renting an apartment.

It is also embarrassing as hell..

Credit is like fire: useful, but dangerous. Except that it's MUCH more dangerous than fire! A very similar question was asked six days ago, so if you don’t mind I’ll expand on my answer to that one.

The world of credit has gotten very scary in the past decade, so please be smart - protect yourself by being a wise credit consumer. Please be aware that credit card companies are now deliberately targeting those who are the most likely to be unable to handle credit: college students and people who have just come out of bankruptcy. So an 18-year-old is just the fresh meat that the industry is looking for.

These companies are playing for keeps; their goal is to suck every last penny out of as many people as they possibly can. And if the industry can catch consumers when they’re young and innocent, the process is much easier. Let me put the most important information first: If you’re sure that you need or want a credit card and can handle it responsibly, get it from your bank or credit union.

They’re less likely to screw you, or at least not as badly. Make sure that your credit limit is within your ability to pay off in a single month. It’s a good idea not to let it be any higher than 1/3 of your monthly income, at most.

Each year the issuer is likely to offer to raise the limit, or even "automatically" raise it; if you possibly can, refuse. It’s a really bad idea to get into the habit of transferring your balance to a different card, even if they promise a 0% introductory interest rate. You’ll be amazed at how quickly that rate will end (even if they promise it will last for a year).

The law allows credit card companies to raise your interest rate to a punishment rate (which could be 29% or even higher) even if you’ve paid your credit card bills on time. If you’re a day late paying a utility bill, for example - even if you don’t use your credit card to do it - they can raise your rate to the punishment rate. And they probably won’t make that change obvious on your bill.

Many credit card companies will do whatever they can to get you to pay late. For example, they’ll change your due date without telling you (this happened to my father). Or the due date will actually officially be at 7 AM on the morning of the specified date, before mail delivery - which makes your due date effectively one day earlier.

I’ve also heard of cases where companies have receive payment as much as two weeks ahead of the due date, and still charged a late fee. Why? Because they hadn’t processed the payment yet.

The amazing thing is that was apparently legal for them to do! Congress has removed virtually all oversight from the industry. And guess what industry has been making massive campaign donations and spending unprecedented amounts of money on lobbying Congress?

You guessed it! A cash advance via your credit card is covered by different rules from your normal use of the card. The interest rate will probably be considerably higher.

And if you don’t pay off the full balance, the credit card company can and will chose to apply your payment to the lowest-interest debt you have with them. In other words, they can juggle your payments to screw you royally if you don’t pay off your balance in full. Which is why you should always pay off your balance in full, every month.

If you can’t, you may have a serious problem. You’d be amazed at how quickly you can end up losing everything, if you fail to keep control of your credit card. If you’re only paying the minimum every month, it will takes years - perhaps decades - to pay off a debt of any real size.

And you will end up paying two to three times the amount that you borrowed, if not more. There are all sorts of new fees being implemented. For example, many major credit card issuers now have a penalty fee for NOT carrying a balance.

Always read all the fine print on credit card offers, and make sure you understand it. Virtually every credit card company now routinely includes language in their contracts which allows them to raise your interest rate to ANY amount, for ANY reason whatsoever, without warning. Congress almost totally deregulated the industry, and as a result we are seeing the early stages of the meltdown of our credit system.

This answer could be three times as long, and it still wouldn’t tell you all the tricks that credit card companies can use to ruin you. For example: the card in the offer may not be the card that you actually get - the terms will be much worse than what you thought you were applying for. Another example: if you pay off your card and believe you’ve killed it, the company has probably only put it into "dormant" mode.

If any sort of charge ever comes against that account - even some little annual charge that you paid with your card last year - BOOM! Your card is fully activated again! So here are some links well worth reading: THE CREDIT CARD TRAP: How to Spot It, How to Avoid It Escape the Credit Card Trap My experience: my wife transferred a sizable credit-card debt to a new card that promised low rates.It wasn’t impossibly big; we could probably have paid it off with two years of sacrifice and saving.

Within three months our rate was over 29%, and the monthly payments we were able to make were less than the accrued interest and penalties. In other words, we owed MORE every month no matter what we did. Within a year our debt had more than doubled.

We faced bankruptcy and the loss of our home. I can’t make this clear enough: we were going to lose EVERYTHING. Our home.

All our possessions. Every single damned thing we owned. I wouldn’t be surprised if that included our pensions, incidentally.

And since the bankruptcy law was revised (with the assent and support of a surprising number of Democrats, as well as most Republicans), it would have been virtually IMPOSSIBLE for us to ever get out of debt. Fortunately an incredibly lucky break allowed us to pay off and kill our credit card (a Discover card, and it wasn’t easy; Discover fought like hell to keep that card active). Words can’t express how we felt when that happened.

But far too many Americans are deeper in debt than we ever were, and they will lose everything as a result. Congress’s contemptible gutting of bankruptcy protection for all but the wealthiest citizens and corporations only makes things worse - and intentionally so, since it was lobbying from the credit-card industry that was a major factor in getting that bill through Congress. There are credit advising organizations to help people who are in trouble with their card.

But while in the past credit card companies would work with credit advisers to help those in financial trouble pay off their debts, these days if you see one of those credit advisers or organizations that is is often used as an excuse to raise interest rates on your credit card debt to the maximum penalty rate. Credit can be useful...but it’s also a tap into your financial jugular vein. When you have a card, you are entrusting your financial life to strangers.

Treat credit with the greatest caution you possibly can, because it can ruin you before you know it. Good luck!.

Don't be a chump! I'd warn them that the bank markets the card to make them feel special but it's a bait and switch game. They want you to max it out and be an indentured slave to them.

But, you can use them wisely. Kind of like getting free drinks in the casino but you're not losing money. Pay the balance off EVERY month.

Get a rewards version that gives you dividends such as air mileage or rebates. Get the best interest rate regardless of whether you pay it down each month. Reward the less greedy and avoid the evil greedy banks altogether.

Get an American Express that MUST be paid monthly and fight the annual charge till they drop it threatening to drop the card. Drop the card if they refuse. Get a card at a credit union instead of the evil giants.

Leave the card at home. Don't always trust your spouse. You'd be surprised at what they fall into financially.

There's my list. Avoid the sharks at all cost. And lord don't even ask me about the scum of the earth payroll loan folks...

When I got my first card..... I got a debit card and a credit card. The advice I was given (which has turned out well) was this: Only use the credit card for true emergencies. Otherwise, if you can't afford it - don't buy it.

Once you do use the card, make a plan for when you will have it payed off and stick to it. It's better to miss going out to dinner with some friends or that trip to the ice cream shop than to have credit card debt. It seems like you have a lot of freedom because you have this card and credit limit, but it's really a fancy cage.

Don't let it catch you. So far it has worked for me.

Always pay your credit card in full at the end of each month.

I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.