Describe How To Use Credit Wisely Research Paper

Credit cards have become increasingly popular world-wide, making it easier to buy now and pay later but are they actually helping or hindering someone’s credit? “Maxed Out” by James D. Scurlock demonstrates how credit cards can hurt someone’s credit, while “Why Won’t Anyone give Me a Credit Card” by Kevin O’Donnell demonstrates how someone may have financial stability to pay off a credit card, but still be consistently denied one by the credit card companies. Owning credit cards is not the problem; the problem is being irresponsible with it.

     Another example of a purchase that credit may be used for is non-durable. These types of purchases include food and services. Many college students use credit on this “pizza and beer” type spending. It’s a much more convenient way to pay for such purchases with the slide card method. Overspending is a real danger in this area. Many consumers will quickly over extend their spending and find themselves in large amounts of debt for purchases that are non-durable. Many things can only be purchased with a credit card and may lead to an entirely new group of expenses itself. This type of spending must be closely monitored to avoid ruining your credit report.

One may decide to pay cash for everything but, there are reasons to focus on obtaining and keeping a good credit score. The first step toward understanding how credit affects ones’ life is to check the credit standing. One can get two of their credit scores for free on Credit.com. This completely free tool will break down the credit score into sections and give a grade for each. For example, how is the payment history, debt and other factors affecting your score, and get recommendations for steps that can be taken to improve ones’ credit. It is possible to get a free annual credit report from each of the major credit reporting agencies Equifax, Experian and TransUnion once every 12 months. This does not give the credit scores but, it does

There is a surprising amount of people that don't know how their credit works. Almost everyone has to make financial decisions before they even graduate high school, and most struggle after making that decision since they were not prepared to make that

Currently, I don’t have a credit card. All of my payments are made in cash of with my debit card. In the last lecture we learned that it is a good idea to get a credit card young so the credit can start building. Mr. Klassen says that he uses his card for the necessities that he has to buy anyway such as gas and groceries. I would like to implement that in my own spending habits once I get a credit card. I would keep my balances low by being responsible with how I use my card. In addition, I will start out with only one credit card. There is a lot of temptation to open up many cards with different companies, but with one card it is easier to keep track of your

5. Excessive spending habits: Not everyone is budget savvy. Some individuals let their wants or desires drive their spending habits by purchasing items and services that are not a necessity for basic living. Credit card spending can help fuel this type of habit. Too much credit card debt could ultimately change the borrower’s ability to repay for their mortgage and other liabilities.

It is imperative that young adults comprehend the facets of obtaining and maintaining proper credit in order to sustain a sound credit history. For example, the most widely used credit score is Fair Isaac Corp.'s FICO score, which ranges from 300 to 850. A FICO score of 760 or higher reveals an individual’s respectable borrowing power, for even a recently reported late payment can have a substantial effect on a credit score (Holmes). In addition, young adults can learn the importance of securing proper credit and increase their attractiveness in lender’s eyes by aiming to use less than 20% of one’s available credit (“Get”). Since lenders pay close attention to the amount owed on credit cards relative to the limits provided, lenders are able

Using credit is quicker and easier these days than spending cash or writing a check. To avoid the long lines we will use the internet to shop or make a quick call. The debt process can start with this months mortgage payment or a week of groceries put on the card. After making the credit card payment, including interest, the following months charges climb higher from the cost of other bills and lifestyle habits added to the card. Before realizing it the debt is out of hand and stress levels build to feeling helpless. If this sounds like you, Christian Credit Counseling can help relieve those anxieties.

During the Financial Fitness module I learned more about my credit score and how to improve it. I also learned the different ways a credit score is made up of. A credit score is usually used to see how likely you are to pay back money that you owe. Usually banks use them to issue loans or credit card companies’ use it to decide if they want to give you a credit card and how much they want to set your limit to. It is important to build your credit score up because it will benefit you in the future when you need to borrow money or even get a job. Some jobs check your credit score before they hire you. Also if you don’t pay a bill your credit score will go down after 30 days past the due date. Some advice I learn was to get a credit card when

Trying to manage your budget is knowing your credit score, how much money is on your debit card and having insurance to help us save and budget our money. The impact of of a credit score “is a number indicates to lenders to repay the loan you borrow”(Investopedia, para1). If you have good credit score then you can mortgage a house but if you have bad credit will you’ll keep renting a house or not live in a house. With a credit card if you’re using it to make a purchase then you promise to pay the money back, also to that’s how you boost your credit score up. With a debit card if you purchase something it comes out of the account electronically.

The stories of people’s lives ruined because of either ignoring or poorly managing their debt is common and are heart breaking. I did not know about this reality until I took Financial Management, and I know to use them not for recreational uses, but for emergencies. Have a relative that needs an operation? Use a credit card to pay it off quick, but remember to pay as much as possible for the monthly plan or else you will be paying more than you spent. Being careful is not a prominent trait for most teenagers. It is the stage of life where they want to experiment and try anything without thinking of the consequences, like impulse buying. Just knowing the possible outcomes for using a credit card would prevent some people from ruining their life from credit card

Instead use cash for all your purchases. Any credit card purchases should be paid in full the same month of purchase. Do not carry a balance on your cards.

You should be paying all your bills on time consistently. Even if you have plenty of money, late payments reflect badly on your credit history. If you have too much debt for your income, you need to work at paying it down. If you are living beyond your means, you need to change that fact. Although financial products may help, this is mostly about earning more and spending less.

Pay your bills on time. When you are late making payments this has a significant effect on your credit score. If you can’t pay your bills on time how are you to be able to pay creditors. I know it can be hard and temptation is strong, but remember my previous articles regarding budget planning? Put those suggestions into place, if they are already in place awesome. You know that random shopping sprees and impulse purchases are out of the question. This behavior normally results

In the world of personal finances, credit cards play an important roles in lives of many people. Sometimes, it's out of choice while other times it happens out of necessity. Regardless of why it happens, the numbers surrounding credit card debt are worthy of scrutiny in order to determine whether having or using credit cards is a sound financial decision.