Many people have more credit cards in their wallet than they use in a single week. It is a simple fact of life. It is just more convenient to use credit cards than it is to use cash. Plus, the offers are simply to tempting to resist sometimes.
Offers such as "earn 1% back on every purchase," "earn 3% back on all drug store and supermarket purchases," "earn free flying miles," or "earn a 10% discount off your first purchase," tempt consumers to sign on the dotted line and charge away.
Unfortunately, the bills follow soon after that and sometimes, they are a bit more exorbitant than consumers had hoped they would be. Fairly soon, the temptation that prompted the initial acquisition of a new credit card seems minimal compared to the added expense that materializes with each new month of credit card charges.
Learning how to use a credit card responsibly is no more difficult than learning how to ride a bicycle for the first time. What is difficult is sticking with what you learn. In fact, a few simple strategies for using credit cards according to your age bracket can be helpful when it comes to credit card use. After all, spending patterns vary from the very young to the very old.
Credit card tips for students
Teenagers and college students should only use credit cards for the necessities in their lives. Everything else that they purchase should be paid for in cash. It is simply too easy to accumulate tons of debt using credit cards when you first begin to acquire possessions on your own. In fact, manufacturers make it so easy for young consumers to spend more money than they responsibly should.
After all, every new season brings out an entire plethora of new video games, DVDs, CDs, and electronic devices. Plus, every new fashion season brings with it a wide assortment of new colors, patterns, and styles that simply must be purchased unless young adults are aiming to look as though they haven't a clue as to what the fashion of the day is.
Moreover, young adults typically have limited incomes to go along with their long list of desires. Therefore, it is simply a matter of economical sense to restrict their credit card use to the necessities rather than allowing their spending patterns carte blanche when it comes to credit card use.
Parents should monitor their children's use of credit cards in the early stages with the understanding that the credit card bills will be the student's responsibility. This engenders responsible use of the credit card that will hopefully stick with the individual throughout life.
Teenagers and young adults will be forced to deal with either responsible use of their credit cards or the fallout when the credit card bills exceed their monthly incomes. This practice will help them to learn how to handle money and credit card usage responsibly.
Impulse spending should be restricted to cash only purchases in order to help instill responsible spending patterns. Parents should caution their children that the bills only get larger when they are not paid in full and that interest charges can begin to exceed the initial balances if left without being paid for too long.
A credit card with a low limit is the best strategy for new credit card holders. This should safeguard students from amassing too much debt in a short period of time. Plus, parents can offer to monitor their children's spending patterns with nonjudgmental guidance rather than negative criticism.
Credit card tips for adults in their twenties and thirties
Adults in their twenties and thirties should implement credit card use into their spending habits as a means to an end. Specifically, they should use credit cards with an eye to build a solid credit history. This practice can advance the possibility of obtaining good mortgage interest rates when and if they decide to purchase a home.
However, since credit card policies vary from one to another, it is important that adults in this age bracket shop around for their credit cards. Interest rates, annual fees, perks, and late payment charges vary from one credit card offer to another so it is important to select the credit card with the lowest annual cost at this point in life. Lower interest fees, annual fees, and penalties should help to keep credit card spending in check.
In addition to saving money over the course of time, lower fees should assist in paying off the bills in a timely fashion. Although adults in this age category should be able to use their credit cards for more than the basic necessities of life, they should maintain reasonable spending habits. This suggests a spending strategy that restricts spending to expenses that can easily be paid when the credit card bill comes due. In this way, these consumers should be able to establish good credit scores as long as they pay off their bills on time.
Large purchases should be avoided since the interest rates can easily create an extra expense that is not readily paid off. One strategy that would help to avoid exorbitant credit card interest charges is to save at least one half of the purchase price of a large item before making the purchase. This would allow the individual to realize quite a savings when it comes to saving on interest charges while carrying the balance of the debt until it is paid in full.
Additionally, adults in their twenties and thirties should select a credit card that offers perks that will be of the most use to them. For example, if they travel frequently by plane, they should get a card that offers free air miles. If they use their car excessively, they should get a credit card that offers a discount or kickback on gasoline purchases. Additionally, store specific credit cards might also be a consideration for this age bracket.
Credit card tips for adults in their middle years
At this juncture in life, many adults have amassed a greater number of credit cards including store specific cards than they could possibly need. Eliminating a few of these cards can not only simplifies bill payments, but also, it could free up cash especially if there are annual fees on any of the credit cards. Any savings that are realized by eliminating some of these credit cards should go straight into a retirement fund.
Again, adults in their middle years should select a credit card that offers perks that will be of the most use to them. For example, if they have are feeding a large family, then they might want to obtain a credit card that gives a percentage back on every supermarket or grocery store purchase.
Credit card tips for adults in their senior years
Senior citizens often need to pay for rising medical costs including physician care, prescriptions, and dental work. More often than not, seniors use their credit cards to pay bills of this type. Unfortunately, this can easily turn into a spiraling debt. Obtaining a credit card that offers a percentage back for drugstore purchases can help to alleviate a portion of the debt.
However, considering other options, such as eliminating credit cards and obtaining a reverse mortgage or acquiring a part-time job, might be a better solution.
