3 things every millennial needs to understand about credit cards!
3 things every millennial needs to understand about credit cards
Most of us get our first financial planning lesson from our family. And a lot of times these lessons tend to be fear-driven. It’s always about a relative who lost a chunk of money in a scam or a neighbour who accumulated huge debt.
And while it’s good to be cautious, it’s also important to have a positive outlook on credit. Because as a millennial, you may need it at any point. Here are three things you must know about credit cards.
1. Access to credit is crucial
Not all aspirations can be attained easily with your paycheck, but that doesn’t mean one shouldn’t dream big. Most major milestones or big purchases require credit or loans. And your credit score acts as your character certificate in such applications.
One way of earning good credit history is using your credit cards well. Here are a few thumb rules you can follow to ensure that:
- Always pay the bill on time and pay total amount received on your statement
- Never pay minimum amount received on your statement
- Do not accumulate debt
- Avoid late payments
- don’t withdraw cash from your credit cards through ATM
2. Drop the credit card fear
Sometimes people avoid credit cards for fear of high-interest rates and fees. What they forget is these charges are incurred by those who failed to pay their dues on time. Paying interest fees is a choice, you can easily avoid it by paying your dues in full and on time each month.
Another thing you can do to avoid paying any extra fees is to be aware of any charges levied on you. These charges are only levied on using certain fees like forex charges, balance transfer fees, cash advance charges, etc.
3. You can build a healthy relationship with credit
Without access to credit, fulfilling your life goals is highly unlikely today. Planned debt or credit helps you take a systematic approach to your dreams. Be it building a home, expanding your enterprise, or just going on a vacation etc of a lifetime, having access to credit can make it all comes true.
Building a healthy relationship with credit is allowing yourself to dream bigger. You can do so by maintaining a good credit score, analyzing your credit reports, and tracking your finances.
all the best.