Credit has been around pretty much since the dawn of time, yet many of us still have not figured it out.
We act like it is bad…
We act like it is shameful…
We treat it like something that has to be kept in the shadows, along with the other societal taboos…
But, really credit itself is neutral.
It is good to have credit and it is not good to use too much credit. How much is too much? Well, that depends on the type of credit, your income, and what you could be doing with your money if you were not using it to pay your credit debts.
Good credit habits give you an opportunity to leverage your money:
– You can make purchases using credit that give you rewards you would not get for paying with cash.
– You can use someone else’s money to pay for big purchases (like a house) so you can pay them back at a lower rate than you can earn elsewhere.
– You can take possession of what you really want now, instead of having to wait to save up for it.
Abusing credit can make your life extremely difficult:
– Buying more on credit than you can afford to pay.
– Using credit as a crutch to delay an inevitable shortage of funds.
– Using credit to subsidize a lifestyle you cannot really afford.
You will want to make sure you have your credit in a good place before applying for a mortgage, auto loan, or personal loan. If you are not sure of where you currently stand, you could check out the steps we covered in Monday’s post:
If you find yourself trying to buy someone’s affection or keep up with someone else’s standards, we covered consumerism on Tuesday:
If you find yourself further in debt than you are comfortable with, check out Wednesday’s post. A lot of people contact me about this one, so you are definitely not alone if you find yourself in this position:
When you have good credit and are ready to uplevel your game to having the credit card companies pay you to use their card, check out Thursday’s post:
If you have any ideas for future posts, or if there is something you would like me to cover, please let me know. As a financial educator, there are so many possibilities and I want to be sure I teach you what you really want to know and what will make the biggest impact in your life.