There is a time and a place for everything in the various stages of adult life, and having a credit card is something you should think about early on. Which clearly I did not, hence why I am doing the research now.
Credit Cards, those scary thin pieces of plastic, can actually save your ass later on in life when you're in need of a credit check. The key is to pay. them. off.
Paying off your credit cards will leave you with a good credit history which can set you up for a loan, mortgage, apartment, and clear background checks.
In my research, I have found that a certain credit card can serve a certain purpose depending on where you are in life:
1. College: A Card for the College Kids
For you kids still in school, or even high school graduates who have earned the right to get in some good old fashioned American debt, here are some suggestions:
Card w/ No Annual Fee - annual fees are likely not in your budget
Low APR - of course, every human wants this: a low 'annual percentage rate' (APR), this is a charge made to you if you do not pay your balance off on time.
- Say you bought burritos and beer and put it on your card, and oops, you forgot to pay off your card that month. Welllll the credit card company is going to charge you interest for not paying them on time
Recommend: Discover it® - "card for students"
2. Youngish Adults: Post Grads, "Working Adults", 20-30 something year olds
For those of us who have either a full-time job or a couple of part time jobs, you have what is called "income" and although it may not be much... you are more likely to pay off that card.
Cash Back - Believe me, I do not have one, but I need one.
- If you are working in a city with good coffee/buying lunch every day/living for happy hours .. you will likely reap the benefits of a cash back card if you pay for these daily purchases with a rewards card.
- Since younger folk usually have a broader array of stuff they are buying, they are likely buying stuff within those "Bonus Categories".
- -- Let's talk about those real quick: A lot of cash back or rewards cards will fulfill the cash back promise, but have rotating categories (gas, restaurants, etc) where the card can be used only at certain times for certain purposes.
- If you are a young professional who pays your card balance online, you are likely to be more on top of the bonus category schedule. (I am not, hence why I do not have one, but most of my responsible friends do)
Skip the Travel Rewards Cards - Unless you are traveling A LOT, or your putting business trips on your personal card and getting comp'ed by your company later
Recommend: Chase Freedom
Security: I have a Chase Credit card and have found them to be almost annoyingly secure in making sure I am not a victim of fraud. But, hey, better safe than sorry.
3. Retired Adults: Empty Nesters, Retirees
As someone who has recently had some family members go through this, I can safely say I was very, very envious of their card choices. Here are folks that are likely paying their bills every month, can afford a yearly fee, and don't really need to worry about APR.
Recommend: Chase Freedom
Security: I have a Chase Credit card and have found them to be almost annoyingly secure in making sure I am not a victim of fraud. But, hey, better safe than sorry.
3. Retired Adults: Empty Nesters, Retirees
As someone who has recently had some family members go through this, I can safely say I was very, very envious of their card choices. Here are folks that are likely paying their bills every month, can afford a yearly fee, and don't really need to worry about APR.
Cash Back + Rewards: Dooo it. Why not? Well, ok. Don't go too nuts now, because if you are indeed retired then you may be on a fixed income. So make sure when you are looking at reward cards you are smart about it.
- For folks that are enjoying things like golfing, they likely aren't going to pay too much attention to any cash back bonus categories. So I'd recommend settling for maybe a 1% cash back bonus program so you can enjoy your time of leisure and not worry about if you bought gas with your card this week.
0% APR Introduction Offers: If you are planning on retiring, or slowing down. You are likely putting bigger than usual purchases from time to time. For example, cruises, vacations, a new set of irons.
- Take advantage of a new card that offers a 0% interest within the first year or so - make a big purchase and pay that puppy off in small increments interest-free.
Recommend: Citi Double Cash
So there you have it, my first recommendation to starting your adualting journey.
If you have any comments or suggestions please feel free to share in the comments!
Sources:
Nerd Wallet: https://www.nerdwallet.com/blog/credit-cards/chase-freedom/
US News: https://creditcards.usnews.com/discover/discover-it-for-students
CS Monitor https://www.csmonitor.com/
No comments:
Post a Comment