- When establishing your first credit, consider using a secured credit card; a card where you have to make a deposit in a savings account in order to establish and maintain the card. The money on deposit is your security for the credit. You now have an additional incentive to be on time with your payments; your own money is at stake. Meriwest Credit Union offers this type of Secured Visa Card. Info on Secured Visa Cards is here.
- Another secured type of credit option is the credit union share account loan. Most credit unions have this. You make a deposit to an account and then take a loan out against the funds in the account. As you pay it back on time, your CU lets the credit bureau know and it helps get you get established in managing credit. Secured Share Account Loan info is available here.
- When you get your first credit card, do not celebrate. There are those who like to go out and get a quick pizza or a movie when their new credit card arrives. A new credit card is not a good excuse to go out to spend and celebrate.
- Use your credit wisely, purchase assets you need. There are too many people in the world who have credit card bills and have nothing to show for thousands of dollars in debt. Pizzas, concerts, and movies are fleeting and soon forgotten. Furniture is a good reason to use the card. That way, when you are on your couch writing the check for your credit card payment, you have something to show for it. You are sitting on your asset. (Hey, that’s a little credit joke!)
- Avoid gas cards issued by Shell, Chevron, and other oil companies. Those who are new to credit are often unaware that gas purchases on oil company cards have to be repaid monthly. Only repairs and major purchases, (tires, transmissions, etc.) can be paid over time.
- Check your credit report annually at AnnualCreditReport.com to verify your current outstanding credit and prevent identity theft. Do you see a card on your report you didn’t order or apply for? If you are reviewing your report annually, you can take action fast and stop identity theft.
- It seems simplistic, have a budget and plan your spending. A good budget can keep you from using your credit cards or help you pay off the debt you already have.
We are starting to set our schedule of Fall Financial Workshops. If your business, school, or organization has a need for this sort of financial education for employees, students, or clients, please feel free to call upon me to arrange workshops for them. It’s what we do to make our community a better place.
Please contact Greg Meyer, the Credit Union Guy, at firstname.lastname@example.org or 408-365-6328 if you are interested.