If you’re anything like me and other millennials I know, then growing up you were probably told not to get a credit card offer. Though the reasoning was never made 100% clear, credit cards offers were made out to be a sure fire way to find financial failure.
So, why are credit cards good? Pay your bills through credit card bills option. Let’s take a closer look.
As we mentioned in our previous blog, there are 5 factors that go into creating your credit report. Having and using a credit card can have an impact on each of those 5 factors. Not having one can have an impact on your scores as well. A negative one at that.
Healthy credit record must contain all these things interest rate, credit card balance, grace period, minimum payments, earn rewards, credit limit, balance transfers and checking account regularly is a good exercise to fulfill all these tactics for a good credit score.
When thinking about how pay your credit card impacts your score, keep utilization, mix of accounts, and age of savings account in mind. Getting a credit card debt will allow you to open a new line of credit report. Doing so will add age over time and play a major role in your utilization.
Credit cards issuer are also helpful when/if you find yourself in an emergency. Sometimes things happen and you find yourself in need of more money than you have on hand. Having available funds via a credit card could be the saving grace you need to maintain and survive.
So does that mean that credit cards are all good?
Oftentimes the negative ramifications of a credit card are due date to overspending and poor money management. Though you may have be afforded a $500 limit on your credit card it’s not recommended that you spend more than 30% of that during any given time.
Having a credit card is as much about gaining more financial freedom as it is proving your financial responsibility. As your credit history builds, lenders will be able to see a record of how responsibly you’ve utilized your lines of credit which will be used to calculate your score and determine future lending opportunities.
Are credit cards bad? No! Poor usage is bad. Having a good understanding of how and when to use your credit card can be a make or break factor in gaining the credit score that will help you build the life of your dreams. Problems getting approved? Here’s our recommendation for what credit cards that are easy to get approved with for bad credit. For more information on credit cards and building your credit call us today (833) 752-7334.