Using Credit Wisely

By: Anthony Haynes

What is credit and how should I use it?

Credit is when you buy something with a promise to pay it back. In order to have secure credit, and a high credit score, you should only use credit in emergencies. There is also a question, what is the difference between credit and debit? Credit is paid back later, and debit takes money straight from your bank accounts. This eliminates the need to carry around cash.

How Can I Build Positive Credit?

There are many ways in which you can work to build your credit score. One of those is to make sure you always pay your bills on time and in full. Try to limit the number of accounts you have and the number of credit cards you apply for. If you can hold job for a long time, this also helps your credit.

Where Can I Go To Manage My Money?

Here are some places where you can go for help with managing your money:

Betterment: Betterment works on investing and retirement managing.

Mint: Mint works with online bill paying and budgeting.

Dwolla: Dwolla does mass payments and money transfers.

FutureAdvisor: this company works with college planning, investing and retirement.

Simple: Simple does budgeting and online banking.

Pros and Cons of Credit

Credit has some advantages. One of those is the fact that you buy now and pay later. If you wisely use credit, then it will help with building a good, stable credit score. Another advantage of using credit is if you are in an emergency, then you can pay to lets get your car fixed.

The disadvantages of using credit are that you often pay more for something than it is really worth. If you misuse credit it can put you in lots of debt. Also with credit, you run a higher risk of identity theft.

What is APR

APR stands for annual percentage rate. This is what percentage of interest you pay extra on goods you buy. If you have a higher APR, then you will pay more with that card.

Here is an example: If you buy an item for $500 and you have a 18% APR and plan to pay $50 a month, you will then have to pay an extra $45 for that item.

Misc Info

Here is the information for a credit counseling agency here in Ohio...

Apprisen: 4500 E. Broad St. (800)-355-2227. Apprisen can help you by talking about your financial stress. Also you can learn about how your actions effect your credit score.

Credit Reprots

You should check your credit score a few times a year to stay on top of it. You can go to these sources to get a credit report: Equifax, Experian, and TransUnion. If you find a difference on the different credit reports, chances are they just have not updated yet, but you should contact the agencies to make sure you are not behind on payments, or you owe something.