Credit Cards

Credit cards - make sure you can afford them. When you are 18, you can get your own credit cards, but they can really cause you trouble if you spend more than you can afford. Once you borrow money, you must pay it back. If you do not or you pay late, you may be in default by failing to live up to your promise to pay back the money in a certain way. Your creditor will probably give you notice that you are in default. Treat it seriously! Call your creditor to explain the delay and make arrangements to repay the creditor somehow. If not, the creditor can sue you for the money, or it can take back the collateral that backs up the debt. You will have a bad credit rating and it can follow you for years, preventing you from purchasing a car or a home, or preventing you from obtaining a job.

Sometimes no matter how carefully you are borrowing money or using credit cards, your debts pile up. If you absolutely cannot work things out with your creditors, you might have to consult an attorney about the possibility of filing bankruptcy.

Pay attention to the small print! If you are not used to making monthly payments and miss one, you will likely face an increase in your interest rate, late fees, and penalties.

  • Rule of thumb, if you can't pay for something at that time with cash, then you should think twice about purchasing it with a credit card.

  • Be careful and watch out for high interests rates that could cost you a lot more down the road.

  • Always take creditors' notices seriously!

  • If you are in debt, and you cannot work things out with your creditors', you might have to consult an attorney.

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