Want to manage your finances better? Start with the basics. Learn all about credits and debits – and what they mean to your budget.
Financial Advice for Young People
When you buy something for which you do not pay in cash buy use a visa card/ master card, what you are essentially doing is buying it in credit and you would have to later reimburse your ‘credit card’ company. Debit is just the reverse. Here’s some more financial advice for young people:
Credit cards are something most of us are aware of. But getting a credit card is not an easy task. As this entire transaction of borrowing, lending and paying back later is based on trust; your credit history is of vital importance.
So what is credit history? It is a record of your ability to repay all your debts. So everything from the number of credit accounts you have to the amount of loans you have taken till date to the responsibility you show towards paying back your debt are mentioned in your credit history.
So whether or not you are trustworthy with a credit card and should your credit be extended or not are decided on the basis or your credit history by the mortgage lenders and the credit card companies.
Now credit cards are not just an easy way of making payments. They often come with a high rate of interest and relying solely on them for rebuilding purposes is ill-advised. The high rate of interest leads to you in a debt more than you imagine and repaying becomes more and more difficult with every passing day.
There are often bad credit cards that purposely target people with bad credits into using them. These credit cards have extremely high fees and charge rates sky high that leave people in a mess greater than they originally were before using the card.
Thus credit cards are often attributed to building bad credits. Thus the title of this article- credit cards build bad credit- is somewhat apt and sad- both. This is primarily because of the lack of knowledge among consumers. Either they don’t use the credit cards according to their lifestyle or don’t plan properly as to what payments they are going to make with their credit cards and what differently.
They don’t pay attention to their credit scores which need to be managed well if you want your credit to be intact in the market of credit cards. For more financial advice for young people, keep coming back!