things they don't teach you

Things no one taught you Part 2

How do credit card work

You may be in college, or just getting your feet wet in the workplace, but something everyone should know is how credit cards work.  You’ll already be inundated with credit card companies mailing you promotions and approval letters, but do you really know what you’re signing up for?
Credit cards are somewhat essential as they’re the easiest way to build credit, which you’ll need unless you’re able to buy that house or car cash.

Few essentials you need before taking the credit card plunge:

  1. Look for a card with rewards and no annual fees.
    • exceptions can be made, I have a card that’s $95 annually but the cash back rewards more than make up for this.
  2. You do need to pay back what you use on that card, try not to max it out and only make the minimum $25 payment a month.
  3. Don’t go crazy! Credit cards do build credit, which is important but also creditors don’t want to see that you have more than 30% of your credit balance utilized, meaning if you have a total of $10,000 in credit to use, your combined balances on all cards should only be $3000.
  4. Pay them off monthly or as soon as possible to maintain a zero or close to zero balance.
  5. And finally, use your credit cards.  I know it seems like I’m saying don’t use it, but it is important to have usage because companies also don’t like for you to get a card and then not use it; they’ll also end up closing the account out for inactivity.

Boom. You’ve been schooled.

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