High School Graduation Applying For A Credit Card

2016-07-07   minute read

Linda Paul

Lifestyle Debt

​High school graduation is a rite of passage into the adult world. You’ll have new opportunities, more responsibility and more personal freedom. You’re already accustomed to businesses targeting you as a potential customer. Get ready! You’ll see even more of that now and one of the prominent new products you’ll be offered is credit. That may be in the form of a credit card, vehicle financing or other.Is it a good idea for you to get a credit card? If you have no income, the answer is probably “no”, but here are a few things to think about:As soon as you make your first credit application, you’re starting to build your credit report.Without income, you won’t likely qualify for the card unless you have a co-signor. If you’re refused credit, that will damage your credit rating.If you default on your minimum monthly payments, that will also damage your credit rating and if you have a co-signor, they will be called upon to pay your debt.If you do have an income, getting a credit card with a low credit limit can be a good way of starting to build a credit history. But avoid terms that are likely to get you into trouble. For instance, regardless of what a lender suggests for a credit limit, choose one that is safe for you – i.e., you don’t’ want to be tempted to spend more than you can afford. Always pay your balance in full when you get your monthly statement.Choose the right type of card – some of the ‘points’ cards also carry annual fees. Check out the interest rate on the card (although there is very little variance among consumer credit card issuers). Some lenders will offer an “introductory rate” of around 20%, but that will increase after your “introductory period” expires. And keep in mind that the true interest rate may actually be much higher than it appears because it’s compounded (i.e., added to your balance) on a monthly basis or more frequently.Don’t use the card for cash advances – it’s a very expensive way to borrow and a bad habit to get into. You’re probably already quite aware that, once you have a credit card, other lenders are going to start offering you their cards. That might make you feel good, but best to ignore them, at least until you know you can completely avoid the temptation of using credit that you can’t pay off in full within thirty days. For most of us, multiple credit cards aren’t necessary (or advisable). Develop a good relationship with one lender. That will be of value to you in future. Whether you choose to go to college and / or university, jump straight into a career or spend time travelling post-graduation, the shift from relying on mom and dad to having to manage your own finances and debts can be daunting. If you’ve now found yourself in a position where you’re in over your head with debt payments you’re not able to keep up with, the faster you act and take charge – the better! Consider meeting with your local Licensed Insolvency Trustee, where you can get helpful advice on your unique situation and a viable debt solution plan that works for you! To learn more about how MNP Debt can help you, contact any of our local offices at: Surrey 15300 Croydon Dr., Suite 200, Surrey, BC, V3Z 0Z5 T: 604.574.7216 F: 778.571.3549 Surrey (Fleetwood) #11-15243 91 Ave, Surrey, BC, V3R 9K2 T: 604.574.7216 F: 778.571.3549 ​ ​​

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