Got Credit?

Things I need to do: stop talking. Too bad the chances of that are nil.

Almost a year ago, I mentioned I never want to have credit because, from the perspectives I got of many cardholders and reviews, it was overall a trap. Can I go back and slap myself now?

Okay, I still am cautious, but it turns out credit cards and debts aren’t so scary if you can manage them. Currently, I have a total of three credit cards and a limit across all three of $2,700. I only planned on one, but I was attracted to the second for its cashback reward and the third is a medical credit card, which is immensely helpful and allowed me to get the new eyeglasses I very much needed. I stick with the advice of spending less than 10% and several months of on-time payments with the first card was rewarded with an increase in my credit limit for that card. Before I attained the third card, my credit score read over 700, into the “good” zone, and I was very proud of that. The debt for my eyeglasses caused it to tank by a lot, but I’ve been assured it will climb again after I pay that debt off, which I have been doing steadily since. Thankfully, my job pays me enough to let me pay four times the monthly minimum payment so I can avoid interest after six months. With the other two cards, I pay off the balance in full every month.

Having just one credit card proved to be more helpful than I expected. It allowed me to pay for something I may have needed right then, but not have to pay with my own cash until I got my paycheck. That’s not to say I use my credit cards just for the heck of it, but they are used for small purchases like train tickets or a small snack to hold me over at work. The only “big” purchase I really use one card for is my cell phone bill, and I didn’t do that until I got the increased limit on the first card to avoid spending more than 10% of its limit. I don’t forget credit must be paid back!

I’ve had credit offers come through mail and email since I got my first card, and the offers have only increased since then. It’s gotten to the point I get at least one credit offer every week, some from the same companies I’ve already said no to. I just cut them them and throw them in the trash. I’d think the debt I have and my score tanking would decrease the amount of offers, but it seems like I’m now getting them simply because I have a pulse. One was even a pre-paid debit card, and it was not a sample card! It wasn’t activated, however, so I was able to discard it without consequence. Why the heck would I load a debit card with my own money when I could just use the one I already have from my bank that’s connected to an account with my money?

My experience does make me curious about one thing: how do people get in over heads with credit card debt? Barring medical and other unforeseen necessary expenses, and the company screwing you over (I’m not ignorant; I know some companies suck), it seems like credit card debt is the easiest debt to avoid. Yet, I’ve read of people being thousands of dollars in credit card debt, as high as $100,000 in one anecdote I read. I can’t even spend $100 in a week unless it’s for bills. I remember when I saw my first card’s limit increased and my immediate thought was, “What the heck am I going to spend that much money on?!” Of course, my viewpoints aren’t universal, but the point is reading of people in huge amounts of credit card debt that is not medical or other unforeseen expenses leaves me stunned.

I certainly don’t plan to acquire debt just because I know I can pay it off. I love not owing money to anyone! I cannot wait until my eyeglasses are paid off and the balance on my medical credit card reads zero. I could’ve paid it off with my savings, but I figured it’s better not to wipe out my savings account.

I have no regrets about getting a credit card. In fact, increasing my credit score is what let me get that medical credit card. I applied for it two years prior and was rejected because my score was awful. I had no idea it came with such a huge limit, but since it covered the whole cost of my eyeglasses, along with insurance, I’m very grateful. And yes, I know better than to max out my credit  cards! Not something I want to do anyway since, again, that money must be paid back! I also don’t plan to have a lot of credit cards. I do know a high limit of credit is good for your score, but I’m not someone who needs a lot of credit.  Then again, maybe I do to stay under 10% of my total limit.

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