Pros and Cons of Credit – Part 2

Carrie has been writing about their experience with “needing” a credit score. Honestly, I believe it is a bit unfortunate that in today’s world people are required (in a sense) to have a credit card. In a way, this makes accruing debt much too easy.

Like Carrie mentioned, I grew up thinking debt and credit cards were not good. After watching Tim and Carrie get established after their marriage however, I began to see first hand that a credit score makes life quite a bit easier.

Because of some of the difficulties Tim and Carrie experienced, my parents began encouraging me to get a credit card now so that I could start building a credit score. My parents suggested getting a Best Buy credit card…but it’s a credit card that can only be used at Best Buy and I don’t shop there frequently.

I heard about getting a credit card through Amazon. I love Amazon! It’s the primary place where I buy my books. Since the Amazon credit card allowed me to get points on all my purchases that I could then redeem for Amazon gift cards, I was excited about that chance. So that is what I did.

Tim and Carrie had trouble finding a credit card company that would give them a credit card…because they didn’t have a credit score! No kidding…that’s what they are trying to get. It’s indeed a strange system that wants you to have a credit score and yet if you don’t have a credit score you can’t get a credit card!

Anyway, I applied for the Amazon credit card online expecting to have some difficulty like Tim and Carrie were having. But I was immediately approved! We think it was because at one point it asked for our total household income…and I was able to include my dad’s income…which incidentally makes up the majority of household income. Because I’m still living at home, I was able to be immediately approved for a credit card. If I had been out on my own, I’m pretty sure I would have run into similar problems as Tim and Carrie.

Of course, with a credit card must come responsible spending habits. I need to keep a balance on my credit card each month in order to be building my credit score. Mom suggested that each month I pay however much in order to maintain a $50 balance on my card each month. I’ve adopted that practice. It helps keep me accountable and keeps me from spending out of control.

~ Melinda ~

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2 Responses to Pros and Cons of Credit – Part 2

  1. Jenny says:

    I hear you about the credit card score spin. it is just plain crazy. Erik and Emma went through similar situation as Tim and Carrie when they tried to purchase their first car. You are very wise to start building your credit score right now. Gone are the good old days of cash on the barrel!

  2. Nathan says:

    I ran into this problem a few years ago. I couldn’t get a credit card because I didn’t have any credit score, but I didn’t have a credit score because I didn’t have a credit card.. A vicious cycle.

    What we did was we were in the market for a new appliance and they were offering no interest financing for 6 months. Even though we had the money in hand, we signed up for the financing in my name and then I paid the minimum for about 4 months then paid the whole thing off. That gave me enough credit to get a card with a low limit and since then has allowed me to build my credit score.

    I think that is is perfectly possible to use a credit card responsibly. You just have to make sure that you have the money to pay for what you are buying. In addition, many card issuers offer rewards that over time can be quite substantial.

    Also bear in mind that a credit score is used for a lot of things, not to just determine if you qualify for a loan. For example, I ran into a problem trying to sign up for a cell phone plan. I originally had to do it under my dad’s name because I did not have any credit score (they don’t want you to sign up, rack up $100’s of charges and then say you can’t pay it).

    So anyhow, just my 2c. It turned out that it was a much bigger issue than I first expected it to be when I went to get my first credit card.

    The Amazon credit card sounds like an interesting way of doing it too.

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