Thrifty Thinking: Millennials & Credit Tips

Tips provided from Coupons.com‘s Consumer Savings Expert, Jeanette Pavini.

Building a credit history is important. And just because you don’t have anything negative on your report does not necessarily mean you are in good shape. Without a credit history, you are a wild card. A landlord, a car salesman or a credit card company doesn’t know if you’re capable of paying your bills on time. They don’t have any proof that you can be responsible with your finances. 

 

That being said, getting out of debt is hard and late payments on a credit card is one of the worst things you can do to your credit score. If a millennial truly does not think they are ready for a credit card then it’s probably best they hold off. Consumers could also get a credit card but not carry it around in your wallet for everyday purchases. Instead, connect it to an auto-pay account like your monthly gym membership. You can even set up auto-pay from your checking to your credit card for that amount each month. Your credit card pays your gym membership, your checking pays your credit card, you don’t even have to think about it. You are building a credit history without the temptation of that magic plastic card burning a hole in your wallet every day. 

 

Check your balance regularly. One of the pitfalls of credit cards, especially to new users, is there is this disconnect between swiping that plastic and the actual money you are paying. You don’t feel the pain of paying when you buy $100 in groceries, $250 at the department store, $200 on concert tickets, etc. but then your credit card statement comes and you realize you racked up a couple of thousand dollars in expenses for the month. Get in the habit of logging into your online banking every morning and just glancing at your balance, checking for any errors. Always stay really conscious of your spending and know what that credit card bill is going to be that month.

 

Whether you have a credit card or not, check your credit reports regularly. Even if you don’t think you have a credit history, checking is important so you can identify any fraud or dispute errors on your account. Some identity thieves actually target younger consumers since they know it’s unlikely their credit history is being monitored. So you could have some cleaning up to do on your credit report before you even hit 18 years old. www.annualcreditreport.com is the truly free credit report website where you can obtain 3 free reports a year.

 

Reassess your credit card. Often “starter” cards are more for building a credit history and don’t necessarily come with the best rewards. As you build a credit history, you will be more likely to qualify for cards that offer higher rewards and a lower interest rate. Along the way, reassess your credit history and decide if it’s time to graduate to a better card or request a lower interest rate from your current provider. Credit card rewards can quickly add up and one of the advantage of building a credit history is you’ll be eligible for some really high value offers. 

 

Aside from the credit history and the rewards points, there are other perks to being a credit card holder. For example, Coupons.com offers card linked offers — savings to stores like Gap, Vitamin World and Fox Rent A Car that you can add to your credit card. Swipe the card at checkout and you’ll get cash back on your purchase.  Some credit cards also offer things like free extended warranties on purchases, free summer movie tickets and pre-sale tickets to concerts. There are a lot of credit card perks out there and if you are a responsible card holder, then credit cards can truly work to a consumer’s advantage.