Pros and Cons of Credit Part 3

To read my first post on this topic, check out this post.

So what are the pros of credit?

1. It is a great training exercise in self control. Of course the temptation is there…you have a card, just charge it! But before you make that decision, stop and think about the bill that will be coming at the end of the month. Think of all the interest you may gather. Do you have the money in the bank to make this purchase? If not, perhaps it’s just a wiser decision to walk away.

2. A good credit score proves to the world that you are a reliable person. When you go to get your first apartment, you won’t have to pay an extra deposit because you don’t have a credit score. When you apply for a job you can show your future employer how dependable you are. If you apply for a mortgage for a home, you will have a (hopefully!) good credit score to help you out.

3. Of course, if you are going to get a credit card, make sure you look into credit cards where you receive points or money back. After all, if you are going to use one, you might as well make something off of it! (This is something Tim and I have not been able to do yet, but we hope to in the future.)

As to the cons of credit…

1. Nothing comes out of your bank account right away. So you must keep track of how much money you have and how much you’ve spent so that when the bill comes you have the money to pay it!

2. Credit cards can encourage an attitude of discontent. After all, it is so easy to just go out and “charge” something. It’s easy to give into the temptation to buy something because you “need” it knowing that you don’t have to pay for it right away.

3. With a lot of loans, you will end up paying more for the item due to interest being charged.

I wish deciding to use credit cards or getting a loan for a house was a simple, painless process. But no matter which way you go there is some heartache involved. This post describes well what it’s like to live with a mortgage and this post talks about the danger credit cards can get you in. (This post is also a good read.)

But if , as a parent, you choose not to help your children get a good credit score before they leave home you could possibly be making it hard for them to get a good job or a good home for their family. It is a tough decision.

My purpose in sharing our story as well as some of the pros and cons is so parents can see what their choices might mean for their children in the future. This is definitely an issue to pray fervently about. It is not a decision to be made lightly.

 ~ Carrie ~

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