What to Know About Credit Cards

November 10, 2020 - Jacob Silva

What You Need to Know

  • Looking to move out of your parent’s house? Many apartments or renters will not rent to you if you don’t have credit (in this case you would need a co-signer on your lease who does have credit). Getting a credit card will help establish and improve your credit history, as well as increase your credit score. Your credit score can affect interest rate and loan approval, and the better your score, the less you will have to pay in interest and the more likely you are to get approved for a loan or credit card. A high credit score may mean you pay an interest rate several points lower on a mortgage loan than the rate someone with a poor credit history would pay; this can mean thousands of dollars in savings over the life of the loan. 
  • TV shows always led me to believe that being approved for a credit card was such an easy process. Maybe it was back in the day, but nowadays it’s harder to get one. If you have no credit, it’s easier to apply for a credit card through a department store like Walmart or Target, than it is to get one from an actual credit card company like American Express or Discover. If you’ve been with your credit union for a long time you might also be able to apply for a credit card through them. Nusenda Credit Union has a variety of credit cards you can apply for.
  • You want to spend a lot of time researching what type of card is best for you. It’s okay if that means Target for the time being, after you’ve built up credit you can always apply for a more illustrious card. Lots of credit card companies offer different types of rewards, Target for example gives you 5% off your entire purchase every time you use it.
  • The most crucial part of owning a credit card is paying on time. If you don’t pay on time, they’ll charge you interest :/ Don’t allow them to take any more money from you! If you’re someone who has a hard time paying bills, set up autopay on your account or set a reminder in your calendar.

What to Charge

  • I don’t like to reserve my credit card use for only super expensive items, due to the high interest rate and the little money I currently have to pay the balance in full. Feel free to use your card for your everyday purchases! I use mine for gas online purchases from Amazon, and monthly subscriptions. There’s no official playbook stating how to charge your credit card, so if it’s helping build your credit - why not?
  • It’s super important to never use your card as a replacement for money you don’t have. Don’t drop $150 at Foot Locker if you won’t have that same $150 in your bank account by the end of the month.
  • Use your card in the event of an emergency. It’s impossible to predict when your car’s tire might go flat or you need to pay $250 to your bursar's account to register for next semester. As the many of us get paid every two weeks, there may be a time in your life when you’re waiting to get paid, but still have to deal with surprise expenses. This is the time to use your card, in lieu of the money that you know is on its way, but has’t arrived yet.