If you’re going to have a credit card there is one really important thing to consider. Of course this is can you afford to have one. But it goes a little further than just working out if you can afford the minimum payment…
When i first got a credit card it was for around £250 i think. I was very young and this was a relatively high sum of money for someone my age to command. Of course i spent some money on it and bought some stuff i didn’t really need. Well to begin with the minimum payment was about £5 a month. I thought this was great, and i continued to spend.
However, what i didn’t realise was that this payment would rise as i spent more money. Well, to be honest i did realise it would, but part of me didn’t want to believe it, and the other part didn’t think that the minimum payment would rise that much. So within the first two months i struggled paying the minimum payment; it was ridiculous.
Eventually i managed to save up a chunk of money from somewhere and i paid it off, the whole £250. But then, guess what the credit card company did? That’s right, they raised my limit to £500. I did exactly the same with the new limit but to no avail this time. I was literally drowning in the credit card swamp. Then if that’s not bad enough, after i eventually got dragged back onto my feet again, i paid it off and they inreased my limit to $1500!
I’ll have to get a job as a rocket scientist to help her out of this one!