It’s almost time for young adults to begin their college career and what says becoming an adult more than having to start building credit? One of the easiest ways for young adults to build their credit is through credit cards, however with so much information out there it can get a little confusing.
Let us walk you through the process to help you begin the journey of building a strong credit profile and if you’re the parent of a college student or young adult here’s some information you can pass along to teach them how to be financially fit.
The way people typically build a credit history is by opening a credit card. Some credit card options that work great for beginners are rewards based cards, because you can earn as you spend and even apply the rewards to your balance. Look for something easy that doesn’t come attached with many fees and offers a low credit limit.
Since you are establishing your credit, it’s important to understand that you’ll be approved for a small credit limit. What will help build up your credit score and credit limit is charging less than a 30% threshold (i.e. if your limit is $500, don’t charge more than $150) as well as paying off as much of that balance as you can every month.
Chances are you’ve done some research, but before applying look for these features when making your choice:
Some advice for when you open your card or are explaining to your kids how to go about opening theirs, use these guidelines to ensure the credit card is being used to build and maintain an excellent credit score:
Do...
Don’t …
Opening a credit union credit card can be beneficial to your finances especially if it’s your first one. The trick is to learn how to use it wisely and effectively so that it positively impacts your credit score. If you’re ready to take the next step to building your credit, don’t hesitate.