5 Tips For Credit Card Management In Your 20’s

5 Tips For Credit Card Management In Your 20’s

August 11, 2014         Written By Bill Hardekopf

Your 20’s are an important time in your life. It is usually when you are first given the burden of handling and managing your own money. For many, this can be liberating, but it also comes with its own set of challenges. Managing money is no easy task, and it ranks as the leading cause of divorce in the United States. That’s why it is important to learn how to handle your money at an early age, before it takes a toll on your personal life and relationships.

For starters, know the effects that credit cards can have on your finances. It is easy to fall into the trap of misusing a credit card, and that trap can land you deep in debt for a very long time. Here are several tips for helping you manage your money.

Don’t Get More Than One Credit Card

It can be difficult to resist the temptation of having multiple credit cards, especially when creditors are offering incentives in exchange for signing on the dotted line. Having multiple credit cards makes you more susceptible to running up large debts, and if you miss payments, your interest rates will likely rise as well. That makes the problem snowball. Having one credit card is great for being able to manage your money, especially at a young age.

Don’t Get A High Credit Limit

Getting a credit card with a high credit limit could lead you to spend beyond your means. If your limit is $10,000, but you only have $1,500 in the bank, you might be tempted to purchase things you otherwise couldn’t afford. But don’t fall into that trap. By getting a credit card with a limited line of credit, you’ll be able to resist the urge to make extra purchases or waste money on things you don’t need. By only limiting your credit card purchases to necessities, you’ll be able to better manage your money and resist falling into crippling debt.

Pay Off Your Balance In Full Every Month

Too often people rack up huge debts immediately after obtaining a credit card. Then they can’t afford to pay off their balance in full every month and must revert to only making the minimum payment. That’s how credit card debt grows–you only pay the minimum while the rest of your balance accrues interest. Paying off your balance in full each month avoids any interest penalties. Make sure you can afford to pay off your balance in full each month before you apply for a credit card. It isn’t worth having a credit card if you know that you won’t be able to manage the money.

Don’t Get Tempted By Credit Card Offers With Gifts

Credit card companies will make you types of offers to get you to apply—bonus points, free trips, t-shirts, food and other gifts. It’s almost like being recruited. Don’t fall into the trap. These credit card companies are trying to make money, and they know the gifts they offer are a small price to pay for the large amount of money they’ll be making off you in interest and late fees. Managing your money successfully means staying away from credit cards you don’t need.

Stay Focused On Paying Off Your Debt

This can be one of the toughest things do to, regardless of whether you have a credit card, a student loan or another form of debt. It is easy to pay the minimums and not focus on paying off a certain debt. That will quickly lead to financial ruin. In order to avoid this, make it a point to pay off your debt in full, or close to it, each month. Allowing your debt to get out of control will negatively affect your credit score and your ability to get attractive rates on future loans.

Managing your money does not have to be as difficult as it sounds. If you follow these tips, you will find it easier to manage your money, and you’ll have less debt to pay off. What you don’t want to do is build up so much debt that you drown in high interest rates and late fees. That can be the case if you have multiple credit cards and don’t pay off your balance in full each month. Manage your money successfully in your 20’s so that it’s not a problem into your 30’s, 40’s, and beyond!

The information contained within this article was accurate as of August 11, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
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