Credit and Credit Cards

Anyone can apply for a credit card, but not everyone knows how to leverage a credit card to achieve financial goals. Credit cards give you access to money but remember: the money is not really yours — you have to pay it back sooner or later and you’ll have to pay interest on it, too. This is how the companies that issue credit cards make their money – they want you to rack up high bills so they can collect more interest. Instead, use a credit card to help you, not hurt you. If you pay your bill every month, you’ll never be charged interest and you will have an impressive credit history.

What is Credit?

Credit is the ability to borrow money. When you borrow money on credit, you commit to paying it back along with added -interest-.  Having good credit means you have a record of paying back all of your loans on time, which will make it much easier for you to:

  • Qualify for loans
  • Rent an apartment
  • Start a business
  • Get a credit card

How do I get Credit?

Before approving you for credit, lenders will review your credit history (payment history of past loans) along with your current financial situation (income, assets, work history, banking information, and credit cards).

Based on this information you will be given a -credit score-. The higher your score, the better chance you have of getting approved for a loan or credit card, and getting a better interest rate.  A good credit score may also help you when you go to rent an apartment or get a job. Young adults are known to have low credit scores just because they are new to this game, but don’t worry – you’ll get your chance to build your credit!

Tips for Building Good Credit with Credit Cards

  • Consider getting a retail or gas credit card as these are easier to have approved. Find out if you have to pay it in full each month or if you can make monthly payments.
  • When you turn 18, you’ll be offered lots of credit cards. Try to only have one or two. Otherwise, you’ll look like you’re desperately looking for credit – not good!
  • Use your credit cards wisely. Don’t overspend because you’ll feel the heat when you can’t keep up with your rising balance.


Get Your Credit Report Every Year for Free

Every person is entitled to a free annual copy of their credit report from one of the three major credit-reporting companies in the United States: Trans Union, Experian, and Equifax. It’s always a good idea to check your credit to make sure there are no mistakes and to see what a landlord, credit card company, or employer will see when they check it. Seeing what they see will help you answer questions, correct errors, or repair credit. To request your credit report, go to