What? Have I developed a severe case of multiple personality syndrome? Didn’t I just say that you should get a credit card and start establishing a credit history? Yes, yes I did.
And yes, this is a big “but,” credit cards can get you into trouble. They certain got me into trouble a few years ago, and it took me more than two years to pay the debt off. Now, I’m a shining example of what the credit card companies call a “deadbeat:” someone who pays her bill completely, in full, every month. (They call me a deadbeat because they can’t charge me interest anymore – boohoo for them!)
So, back to the “but.” If you start to get into trouble with your credit card, cut it up. Don’t try to justify it like I did, saying things like “Oh, but I have to buy textbooks and art supplies for school! And feed my film crew. And buy these pants.” If you start carrying a balance, you’re in trouble.
- Recognize that you’re in trouble. Even if you’re paying for “necessary things.” Actually, especially if you’re paying for necessary things.
- Cut up the card. By having the card, you’ve done your part to start to establish a credit history. Cutting it up won’t end that (but canceling it will – so just cut it up and don’t use it!)
- Pay off the balance. Do whatever it takes. You probably won’t have to take as drastic of actions as I did (i.e. dropping out of school), so don’t feel bad. Just work to pay it off. (Here’s 5 tricks I used to pay off my credit card debt.)
- Maybe, when you’re done, order a new one. Once the balance is paid off, if you think you can handle your card again, call up your credit card company and tell them that your card was damaged, and you’d like a new one. (You can leave out the part where you damaged it yourself with a pair of scissors.) But, if you do order a new one, be careful with it.
And really, don’t feel bad if you “can’t handle a credit card.” There’s some evidence that credit cards can cause some people to spend more. They just affect your brain in a different way than cash does. And that’s okay… as long as you’re aware of it.
The most important thing is to know yourself, not to try and do everything perfectly as suggested by a personal finance book or some crazy girl on the internet… but to do the things that really work for you.