"I plan to wait until I have a substantial
job before I get a credit card."--Robert
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You cannot get a credit card on your own until you are 18. Then watch out! Credit card companies will begin trying to get you to use their credit cards.
Credit cards are handy for emergencies, but you can go into big debt very, very quickly. If you don't pay off the credit card every month, you'll have to repay the money with interest. And credit card interest really adds up fast!
Here's one example:
Let's say you are 18 and you get your first credit card. You start buying things, and soon you owe $1,500 on the credit card. The interest rate on the card is 18 percent. If you only make a 2 percent minimum payment each month, how old will you be when you finally pay off the credit card?
Answer: When you are almost 26 years old! By that time, you will have paid $1,293 in interest, plus the original $1,500 you borrowed. Not a good deal!
Take the quiz below to see if you will be a tough boss of your credit cards. [DESIGNER: set up the following as a quiz.]
Good Idea or Bad Idea:
- I will have many credit cards.
- I will only pay the minimum due every month.
- I will only use my credit card for an emergency or for things that are true needs.
- I will pay my credit card bill on time every month.
- If I can't pay off my credit cards, I will cut them up, throw them away, and forget about the bill.
- Every time I want to use my credit card, I will ask myself, "Would I go to the bank and take out a loan to buy this?"
- When I'm ready for a credit card, I'll take the first offer I get.
- I'll only let my best friend use my credit card.
Answers:
1.) Bad idea. Try to keep only one or two credit cards. 2.) Bad idea. Try to pay the whole amount due every month, or at least more than the minimum, so you won't pay as much interest. 3.) Good idea. 4.) Good idea. Also be sure to pay well before the due date so you won't be charged a late fee. 5.) Bad idea. It's OK to cut up the credit cards and throw them away, so you aren't tempted to use them anymore, but you can't forget the bill! You must pay off the credit card. 6.) Good idea. If your answer is "no," don't use the credit card. Save for the item instead. 7.) Bad idea. Shop around for a credit card that has the lowest interest rate and no annual fee. 8.) Bad idea. It's better not to let anyone use your credit card, because you'll be responsible for paying back the money.
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