When I was young child, I receiving money from my father. Eventhough it was not a lot of money, I was still satisfied. Now that I am 19, all important purchases require credit. Getting my own place require credit, even buying a car requires that tantalizing card. I have never had a credit card before, and I never researched how those things worked. So I finally found out ow credit works, and I was shocked.
The way credit works is that yu, the consumer borrows money from a bank with the promise to pay the bank back. That sounds simple right? Well, no, there is more to it than that. It turns out that not only are you paying the money back, but your also paying interest on the money that you borrow. That new found knowledge took away all of my enthusiasm towards getting a credit card.
Here I was, wondering why people were so adamant about applying for a credit card. The commercials on television make it appear that a credit card will be something that will improve the holders' lives. In reality, credit brings many new burdens. Statistically, aside from medical debt, credit card debt is the leadin reason why Americans file for bankruptcy. Basically, bankruptcy means that you have so much debt, and so little income, that the government has to pay off the rest. Not only that, they can also repossess your valuables and anything obtained with the card.
Now, upon further research, I have found out how credit card companies target teens who are current or prospective students. Their claims give teens and parents the impression that they can easily provide money for college, but the one problem with that is the student has to know someone with good credit. In addition to that, the student must also have good credit if their cosigner is not approved. Either way, creditors force both the students and the parents into making tough decisions. Along with having to pay off their student loans, they must also pay off their credit card debts.
After all that research, I asked someone who had a card, why did they get one. That person told me that she applied for one because she needed it. I always thought of credit as something that people wanted, but did not really understand. As a matter of fact, a lot of people do not understand it, but they have to accept the rather deceitful terms of credit after they get it. You are required to have credit in order to lease an apartment or lease a car, or even buy a house. These are usually the things that teens are needing once they are near adulthood.
Although I have stated many of the negatives of credit, here is the one positive, safety. Credit is actually a lot safer than plain money. Monetarybills can easily be counterfeited, but a credit card cannot. The only fault with credit is that the card can easily be stolen and used by another person, which can also happen with money. Rather than just losing all of one's money after it been stolen, with credit, your money can be replaced. With paper money, noone can steal your identity because your name is not encoded or engraved in the card. Though, with credit, it is, and requires your signature with each purchase. In summary, the one positive aspect of credit is it's elevated safety when compared to the dollar bill.
My advice to my fellow teens who are just receiving, or about to receive their cards, make the big payments with cash and keep your receipts. Any other small payments, you can just swipe the ol' card. My suggestion is to buy something between twenty to thirty dollars, and pay off the credit bill right away. That will give you agood credit ratings ow, which will make life a lot easier for later. Remember, clothes cn cost a couple hundred dollars, but better knowledge, is priceless.
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The credit card scam is like the black widow.
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http://www.progressiveu.org/blog/tiffany-southall
http://www.progressiveu.org/161923-the-little-you-inside
Credit is pretty much a scam, it's like gambling. Creditors know that teens cannot resist the impulse to buy, and the false advertising too. They use so much fine print in their advertisements, and most teens do not understand the meaning of some of the concepts used in credit card applications. As a matter of fact, many adults do not even understand the terms used on those applications. The fact that both the landlord, dealer, or Realtor, along with the credit card companies work together to force people into getting credit. Which in the end, usually ruins peoples live's.
Georgi3
I think credit card is a great thing for people who know how to manage their money right. I'm not 18 until April of next year, so I'm using a credit card under my sister's name at the moment. But the credit card is actually a debit card. All of the money on the card is what I put in there myself...basically I use my own money. My father say unless you really need to, don't use credit cards. Apply for it and then hide it somewhere. lol But yeah, I'm really looking forward to get a credit card of my own so I can do and buy more stuff without worrying if I can enough cash on me.
As for loans, at the end of graduation, most loans give you about 6 months period where if you pay them back...they will not charge you interest. The bank would say something like "You don't have to pay us until 6 months," don't get fooled! Pay them back as much as you can during 6 months because you won't have to pay them interest. They won't tell you of course, they don't really want you to know. READ the print. READ everything they give you. They're pretty sneaky. But a great friend if you can manage your money well.