Credit or Cupcakes?

Today, the third Thursday in the month of October, is national “Get Smart About Credit Day”, the 15th anniversary of the American Bankers Association’s effort for credit literacy in the United States. While it may pale when compared to “National Chocolate Cupcake Day” which shares the same day, First National Bank believes that financial literacy is essential and warrants attention.

Bankers struggle working with young millennials who often miss credit opportunities.  Millennials are more likely than older generations to have large student loans to pay. About 41 percent of them hold a large student loan balance, according to a 2015 Pew report. Those big debt obligations could explain Millennials’ aversion to borrowing, and over time, they may never grow as comfortable with credit cards and debt as previous generations have.

From Millennials to Boomers, these tips can help anyone establish and manage their credit for many years.

  1. Establish credit early. It will help when you want to buy an automobile or your first house.
  2. Be Strategic: Use debit cards for everyday purchases; use credit when you need to finance large items.
  3. It may be boring but read about the terms of the credit card. Always read the disclosure section, often called the Schumer Box.
  4. Yes, credit cards become a contract with the lending company the moment you sign the application. Keep up with the payments and always try to pay more than the minimum due. A good practice is to always try to pay 10x the minimum due but even 3x the minimum due will help pay those larger sums off quicker.
  5. Keep current. A blemish on your credit file can last seven years on your credit report.
  6. Protect your card from third party abuse. Most likely, consumer fraud protection tools will shield you from unauthorized use, but you should respect the card and not let others use it.
  7. People vary in their card usage. When some people make purchases, they will pay the balance monthly. Others revolve and carry a balance from month to month. Try to make fewer purchases unless you are paying for a specific, durable item.

National Chocolate Cupcake Day may be more exciting and taste better but credit awareness lasts a lifetime and is calorie-free.

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