Vehicle Finance

At the age of 18 I was deathly afraid of credit cards. It took me a couple of years to get over that, but since then I have never looked the other way. For the longest time I used my debit card as my sole purchasing medium. I am now nearly 22, and have been using credit since I turned 20.

At first I didn't realize that credit was so easy to maintain, even though so many people struggle with it. I had assumed that everyone with credit gets into debt because credit card fees are ridiculous. I couldn't understand why people would use credit cards, because all I heard were negative things. That was until I went to a bank with questions. I learned that credit card interest rates are pretty ridiculous, and that the bank was basically willing to loan me $1500 whenever I needed it, and I didn't have to have approval for it. It then dawned on me why people fall in to debt with credit cards: Because they think it's $1500 cash in their pocket. I would assume the majority of them feel like this is a meager amount of money, and that paying it off is no problem when you can make that in a month working at McDonalds. Unfortunately once they spend the $1500 they disregard that as being easily repayable, and get another credit card, because what is $1500 more. Before ya know it they're stuck paying monthly payments on all of their credit cards because they forgot about interest, and can't get beyond the monthly payments.

Since then I have earned a credit score of 641, through the purchase of my first vehicle, paying monthly rent on my apartment, and other monthly finance purchases. I put every dollar I spend on credit, because I want every dollar I spend to go toward my credit score. After all credit is free, and if something is free and its available to you, why neglect it?

So whats the big secret to good credit? It should be obvious by now, but you need to learn how to manage the credit card BEFORE you start maxing it out. I did this buy starting out very small. I used it for gas, and payed it off entirely every month. Once you start doing it that way you get into the habit of repeating that practice. At this point the highest I have let my credit card go was $1265.28. Guess what I did? I payed it off in full before the scheduled minimum monthly payment was due. It would seem like this is a no brainer, but most people neglect the importance of credit responsibility.

There's nothing wrong with spending more than you can pay off in a month. There is however something wrong with spending more than you can foresee paying off, which is what many people do, without a second thought. These are the people that are going to be in debt into their retirement. Always be sure that you can pay something off, and know how long it is going to take you. Know if you're going to add more credit debt in the time frame you anticipate to paying off your large charge, and factor that into your spending.

Be smart with your credit cards people. It's not hard.

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