Credit Cards & Debt: As Told By Your Friends

Whether you subconsciously avoided checking your credit card balance or accidentally missed a payment, you’re not alone. Managing credit card finances is hard, and these are common mishaps most of us have made at some point. If you didn’t have a credit card 101 class in school (does that exist anywhere??), you may not feel super confident about all the do’s and don’ts. Although the Internet has various helpful resources for all things credit cards, learning directly from your peers and friends can be a nice reminder that we’re all in the same boat.  It’s normal to feel a little lost! We rounded up some of our favorite credit card lessons learned that might give you a better idea of how to manage your debt better, and know what to look out for, to avoid some of the usual mistakes when it comes to credit cards.

Set Up Your Own Payment Due Date

“I didn’t know until recently you can call and have your credit card payment due date changed to something that works for you! For example, if your credit card payment is due at the same time as your as rent (the biggest payment of the month), you can move your credit card due date to the latter half of the month to spread out the goodness and not feel overwhelmed when it comes to paying the bills!” – Angela D.

Don’t Fall for the Shiny Rewards

“It’s so tempting to open credit cards that offer a lot of points (like travel credit cards that offer airline miles rewards) but it doesn’t always make sense and can actually hurt you. Unless you are already planning to make big purchases AND have the ability to pay it off right away, it can just encourage ‘easy spending’. At the time, I didn’t realize that the interest rates on my travel credit card were really high, which actually increased the amount I owed by a lot because I let it linger.” – Sofia A.

Avoid the Interest with Balance Transfers

“Interest rates always make it so difficult to make a dent in my debt payment, but I recently discovered the option of a balance transfer. I thought I was just being clever when I took advantage of a 0% balance transfer card offer – but I guess it’s a real thing that people do! Because introductory offers often have no interest rates for a year, you can transfer a credit card balance to another card and actually stop your debt from growing while you pay it down. Two things I did learn if I ever need to do this again: 1) make sure I can pay it off within that year or at least have a plan for after the intro offer ends and 2)  look closely at the offer details to decide if it actually helps you because there are usually transfer fees (ie does the benefit outweigh the fees).”- Jerry F. 

Paying Only the Minimum Amount Hurts You in the Long Run

“I got a credit card in college since they had a  0% APR for the first 6 months for students and the credit limit steadily increased as I used it and paid it off timely. But once the APR time period wore off and I racked up more debt on the card and I noticed the interest fees monthly were almost as much as my minimum payments! I also got in the habit of paying only the minimum payment rather than paying off my purchases as I go. So now I’ve definitely dug myself closer to my credit limit. Basically, my lesson is to be responsible, pay attention to what you’re putting on your credit card, pay purchases off as you go so you’re not accumulating debt over a long period of time.” – Kate R. 

Build Your Finances Together

“I added my boyfriend as an authorized user. It helped us organize our finances, build credit and was a forcing function in having financial discussions on a regular basis. I live with him so it’s also really convenient to use our joint credit card for things like groceries, utilities, and furniture and we both take turns paying it off each month. This way, we don’t have to worry about paying each other back for every little thing.” – Nicole I.

Look for the Offers

“I got a great offer on my Citi and Discover credit cards. I’ve learned that it’s better to wait for welcome offers like rewards points and reduced fees rather than directly applying for credit cards. The main thing to remember is to do your research and see what offers and credit cards make sense for you.” – Faiz M.

Credit Unions Are an Option

“I looked into credit unions because a lot of my friends at the time had accounts. I didn’t realize they have a lot of benefits including higher interest rates on savings accounts and lower fees and loan rates. It was also really easy for me since my college had a partnership with a credit union that was on our campus so it was a popular option for students and I still use it today.”  – Emily L. 

With the dozens of different credit cards out there and a host of factors to consider like APR, interest rates, transaction fees, etc., credit cards can be difficult to navigate. There’s a lot you might not realize or know about and that is completely okay! Talking to family and friends and learning from each other is a great way to confront credit card debt and understand the complexities and pitfalls of credit cards together. If any of these stories and insights made you feel a little better about your finances and helped you learn something, share this with a friend to help them too and keep the #RealMoneyTalk conversation going!