For many people, getting a credit card in their own name is the first “adult” financial responsibility of their lives. It’s a valuable one, too.
Credit cards make it possible for you to buy things online, to shop at brick-and-mortar stores more easily, and to limit your trips to the ATM — all of which are good things.
More importantly, though, getting a credit card in your own name helps you build your personal credit rating.
Your good credit rating is a signal to banks, insurance companies, and institutions. It shows that you’re likely to repay loans, to avoid excessive insurance claims, and to pay your bills on-time.
The reward for a good credit rating is better interest rates, cheaper insurance premiums, and a simpler life.
Having a good credit rating helps you to live where you want to live and to bypass security deposits on things like cell phones and utilities.
These benefits may not matter be high-stakes today, but they’ll definitely matter when you go buy your house.
Wasting money on higher rates and insurance costs because of bad credit is less-than-optimal when you’re trying to save for retirement, or put money toward buying a home.
Having good credit might even help you get a job because employers can check credit history as part your job interview.
These are all reasons to get a credit card in your name as early as you’re eligible — at the age of 18 — and to use your first credit card responsibly.
It doesn’t matter how much you buy with it, either. Even buying one cup of coffee with your credit card once every month will help you build good credit.
Just pay your credit card bill in full when the monthly statement arrives because that compels the credit card company to file a “paid on-time” report to the credit agencies responsible for calculating your rating.
As you accumulate months that are paid on-time, your credit score can climb.
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An insurance claim is an official request you make to an insurance company, asking to get paid for damages. Insurance claims can be made for any reason that’s a part of your insurance policy. When you have homeowners insurance, you can make an insurance claim after a fire in your home; after there’s been theft […]