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Youth and Credit. Credit and your children
There was a time in the world where credit did not exist, that every time one needed to make a purchase, it was done by trading goods or services, and then came along money. The more money you have the more things or services that you can buy.
Credit is a form of money; a line of credit is based on what you earn now and what you are going to continue earning in the future. A line of credit is based on how you pay your bills now, and how you have paid your bills in a timely manner in the past. If you have a steady job or a steady source of income, you can build up lines of credit with credit cards, loans and lines of credit.
To purchase a car, to purchase a home, and to purchase land or make a purchase of a business you most likely are going to need some type of credit, unless you actually have enough cash on hand to make this purchase. This is the use of credit.
To go to college, to continue with your education or training, you are going to require a large sum of money in the form of a line of credit or a student loan. Loans are a way that young people can continue with their education, creating a better future by being able to obtain a better job.
How can you make the choices between so many types of credit out there? First you need to take a look at what you need the money for. Do you really have to make this purchase? One thing to keep in mind is that you canít afford to make too many purchases and then not be able to make the payments on what credit you are getting. For example, if you were to get four credit cards, making all types of purchases, you wonít be able to afford the payments while you are in school and on a limited budget.
However, if you were to take out a school loan and use a little of the extra to pay your rent you wonít have to pay this money back until after you are out of school. If you have a job and a little income, using one credit card to help you purchase books, to get to the doctors or to get home when you need to might not be as difficult to manage.
The point of having credit it only to use what you can afford to pay back within a short time. The more you use your credit, the more bills you have coming in, the less money you are going to have for the other things in life you need, which in turn makes you rely more and more on the credit that you have.
The more you rely on the credit cards, and the loans that you have, the less independent you are going to be and the less you can save for your future. The more you use your credit, the longer you are going to have that bill hanging around in your mailbox.
If you are just in college or possibly, you are just out of college, you are going to find that many types of credit card lenders are going to offer you gifts for filling out their applications. The gifts are nothing that you most likely do not already have. Do you really want another line of credit?
The more credit you have the easier it is to get your self into debt that you cannot get out of. If you have one credit card with a good rate, and a good credit line, limit yourself to just this one card and say no thanks to other cards that can possibly tempt you into using too much credit.
What is the best advice that any young person can take advantage of when it comes to your credit and your financial future? Start small and build big. Start with just one credit card that has a good rate. After using this one card a few years, making your payments on time, not maxing out your card, and not missing any payments, your credit line will continue to build. What was a $500 credit card in college can be $10,000 or more in ten years depending on how you use your credit wisely. This enables you to make the bigger purchases you need without the hassle of getting to far in debt that you canít afford.