Alright, alright. Clearly some people need to be schooled when it comes to all things debt, whether it be credit cards, loans, mortgages, etc.
I'm sorry but I can't stand how people cower in fear at the idea of owning a credit card. I think that you do yourself a disservice by claiming that you will drown in debt if you take out a credit card. YOU'RE BEING IRRATIONAL. If you drive a car, you could drive right off a bridge and kill yourself, but rational people don't have to worry about that because they wouldn't drive off a bridge and kill themselves.
Let me go over the big two for you, loans and credit cards:
A student loan, used properly, is like investing in your future. If you are planning on getting a Bachelors degree, you will pay off your loan-- given of course that you don't spend your entire college career hanging at parties and trying to score some chicks or something-- and you will have made a smart decision in taking out that loan. OF COURSE there are other options. Scholarships, grants, parents, savings, work-studies, etc... but if you don't have them, it's not a DEAL BREAKER. You don't NOT go to college because you would have to take out a loan should you go. That's like saying I'm not going to eat because I would have to go to the store and buy food. It's a means to and end, and used WISELY it's perfectly acceptable. Okay I digress, if you're an idiot, don't take out loans. If you're going to use the money to pay for drugs or new clothes or something stupid, do yourself a favor, and don't. If you're a fool with money, don't bother. I'm really only talking to the intelligent people out there that can control themselves when they see a big number in their bank account. If you're smart, debt shouldn't cause you a big problem. It doesn't take long to get educated on all matters loan. There are too many websites to count and usually banks have them right there on the websites. If you ignore the advice, however, you'll probably screw yourself over. But whose fault is that--- the bank's or yours?? I think it would be your fault.
Some advice:
Only take what you need, find your EAR rather than your APR (if you don't know what that means, I'll tell you just ask!) Pay off interest as you go, if you can (compounding is really what bites you in the butt!), if at all possible avoid ARM's. or any sort of rate that is adjustable, if you don't think that you will be able to handle the payments-- don't take out the loan.
Onward to credit cards... Okay just like you, I've heard the horror stories, I know people that live the horror stories. Under the age of 25 with bankruptcy. I know that there are some valid points out there... I also know that those that got into those problems went crazy buying ridiculous things for themselves. Credit cards are not the bad guys here, if you are smart and understand that you're borrowing money that has to be paid back WITH interest, it should minimize your desire to swipe, swipe, swipe until your strip is gone. There are some amazing credit cards out there. One that I have has no interest up to 250$! It's just like borrowing money for FREE! I know that credit card companies are designed to screw you; but have faith my scaredy-cats! You can be smarter than them, and then credit cards are a wonderful thing! You can buy a house and a car and a cellphone and all of it because of your amazing credit!! Debt has to be respected and it's not a joke... you can use it to your advantage though. Obviously for big purchases, credit cards are great because you have more liquidity (more access to cash) than if you dumped all your money out of your account for a big purchase. Also, many of these cards have cash back, so you get more of your money back. Now I phrase this very carefully. You can use your credit card for all your purchases (if you have a big enough limit) and you would get lots of cash back, quicker... my only advice is to be organized and treat it as though it is your debit card you're swiping rather than a credit card. So that way you deduct your charges from your bank account immediately and know exactly how much you ACTUALLY have. That's the absolute best way to handle credit cards, and if you do, then you can use it and not worry about paying interest at all.
Some advice: Don't fill out C.C applications for free food, you really are selling your credit rating; if you owe a lot, make more than the minimum payment, Don't mix your credit cards, meaning if you take out cash from a credit card, or transfer a balance, or whatever, have separate cards for each, because they'll screw you with interest, watch out for your APR's, I would say that if it's about 15% it's not a good card, but over 20% is unacceptable. If you can't get a great card, take out a gas credit card or a walmart card, you can use it for everyday purchases, but you're limited to one store. It's kinda like staying in the shallow end in a pool. You're pretty much guaranteed to keep your head above water.
Okay friends, hopefully you won't pee your pants the next time someone mentions Credit Card or Loan. I urge you to be smart with your finances, but ultimately know that YOU are completely in control when it comes to debt. It doesn't just happen to you. You make a conscious decision to take on debt, and if you weigh the costs and truly think about it, you'll come out on top, and better for it.
