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MoneyLine blog: 3 Tips to Help Millennials Stay Smart About Credit

Feb 29, 2016

The early stages of adulthood tend to bring on a combination of expenses big and small. It’s easy to find yourself facing costs for everything from car repair to unexpectedly high utility bills. For many of those in their twenties, it can begin to feel very overwhelming and some might be tempted to channel all the chaos into one quick credit card swipe.

While there’s no reason to avoid credit altogether, it’s important to keep things from getting out of hand. Here are a few tips to help Millennials stay smart about credit:

Keep an eye on your monthly balance. Credit card bills run up very quickly when we only look at the balance once per billing cycle. By the end of the month, it’s easy to forget what was charged weeks earlier. It can seem like ages ago! Don’t let it sneak up on you. The best thing to do is check your balance more than once per month, ideally long before the due date. In doing so, you’re more likely to avoid any missed payments – which can hurt your credit score and come with their own additional late fees.

Take a look at the big picture. For example, if you’re purchasing a new car, you might be able to afford the monthly payments. However, don’t forget to account for overall costs that come with car ownership. Expenses such as insurance, gas, registration, inspections and maintenance end up driving up the total cost to be higher than you might realize. Look at the big picture and account for all expenses associated. This will ensure you have enough funds and avoid relying on credit cards to cover those extra expenses.
Use cash as your method of payment. If you’re finding yourself with unmanageable debt, consider making the switch to cash for the smaller daily expenses. One magical characteristic about credit cards is their ability to disassociate the purchase from the reality of what you’re spending. It becomes easy to ‘worry about it later’, potentially leaving you with a balance higher than anticipated. A good trick to avoid this trap is to pay for things in cash. This helps you better associate with the true costs of items that you’re financing, whether it’s a car, furniture… or happy hour.


 Erin Ellis
Accredited Financial Counselor
Philadelphia Federal Credit Union

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