Credit Tips

Credit cards, credit cards, credit cards. Get ready for more advertising on credit cards. After all, it’s profitable — a lot of people are going to be tempted to get a new credit card because of what they see on television and what they hear on the radio. And even if you don’t really tune into either of those things, that doesn’t mean that you’re not going to get tapped to do something when you least expect it — after all, you still get mail, right? Right! Direct mail advertising for the credit card industry is HUGE. This means that there’s always an opportunity to offer you a new credit card.

Still, you really need to make sure that you really do think about whether you really need a credit card. You don’t want to rush into it for a lot of reasons. Need some new reasons to not rush into a credit card? No problem — here’s what we think.

First and foremost, you have to make sure that you are in a stable financial position. Just because you know that a credit card company will grant you credit doesn’t mean that you should go with it. You need to make sure that you actually focus on whether or not you can truly afford it. Even if you don’t use it much, it’s still something that could have an annual fee. You would basically be paying for the possibility of using credit when you want to, but do you really want to pay for the privilege of holding someone else’s money. In addition — every dollar you give the credit card company is one that you don’t get to use to put into your future endeavors. This is something that can be problematic, because you take away from the other goals that you have in your life. For example, you might be thinking about getting a house. A house is going to take up a lot of money, and if you’re deep in credit card debt, you’re not going to be able to get the house that you really want. It’s better to actually think about the type of credit life that you want and go for that rather than thinking that you have to get a bunch of credit cards. In fact, if you’re just going to have a ton of credit cards that you never really pay back, you’re only doing yourself a disservice for the long run.

If you are going to get credit at the top of the New Year, you really need to make sure that you focus on the basics. Pull your own credit reports and really look at them. Just because you have a vague idea of how you think your credit looks doesn’t mean that it will necessarily be the case. This means that you have to get hard numbers.

Don’t just stop at your credit report. Look at your budget — can you honestly say that you can afford another credit card? If the answer is yes — then enjoy the credit card offers. However, if you knew that you can’t, you might want to take your time.

Just because you don’t get a credit card now that doesn’t mean that you can’t revisit the topic in six months after you’ve had a chance to get your financial life in order. And of course, it also goes without saying that if you haven’t started your own savings, there’s no way that you should even be thinking about a credit card. This is not the right way to have an emergency fund. This is where a lot of people get themselves into trouble, because they think that having a credit card means that they can lean on it in tough times. This might be true for a while, but you have to eventually pay that money back and it can be difficult to do this when you’re struggling in other areas. Then the interest spirals out of control, which makes it feel like you can never get back to normal.

No matter which decision you choose, we really do wish you the best of luck!