Treat Your First Credit Card With R-E-S-P-E-C-T!

Congratulations on your first credit card! Now it’s time to educate yourself on how to manage this shiny piece of plastic so that you can responsibly build your credit over time.

Here are some tips to get you started:

  1. Only Charge What You Can Afford.

You’re hanging out at the mall with a few friends, and you spot an outfit that would be perfect for your best friend’s upcoming birthday bash. So you try it on, and as expected, it fits perfectly. Plus, the price is right.

But there’s only one problem: there isn’t enough money in your checking account to cover the purchase. To buy or not to buy? The smarter option would be to leave the clothing in the store until you have enough cash on hand. 

  1. Keep Balances Low.

To piggyback off my last point, credit card debt is easy to get into, but extremely difficult to get out of once you’re in over your head. Those seemingly small purchases can quickly add up and leave you with a balance that’s much higher than you can comfortably afford to pay off each month.

Keep in mind that the amounts owed on all your debts account for 30 percent of your credit score.

So the higher your outstanding balances, the lower your score will be.

  1. Don’t Fall for the Minimum Payment Trap.

Are you thinking you can just pay the minimum payment each month and get out of debt in no time? Well, you may want to think again. This was by far the biggest mistake I made when managing my first credit card. But why? Well, only one percent is allocated to the outstanding balance. Everything else goes to interest and fees.

  1. Always Pay on Time.

If you don’t remember anything else from this list of tips, always remember to pay your bills on time, or your credit score will tank. Case in point: one of my credit cards had a$12.72 balance from a recurring account that I was unaware of. Long story short, the account was reported to the credit bureaus as delinquent on day 31 of it being past due, my score plummeted by almost 100 points, and I was hit with a $35 late fee. Even worse, it took several months for my score to rebound. (Side note: late payments are reflected in your credit report and negatively impact your score for two years.)

  1. Review Your Statements.

Remember that $12.72 balance from the last tip that destroyed my credit score? Well, I have to admit that it was a result of negligence on my part. I didn’t take the time to open the statement because I figured it would be empty. I ended up paying for it big time! Approximately $47.72 and a mangled credit score, to be exact.

  1. Understand Grace Periods.

Due dates and grace periods are not created equal. The due date is the day by which you must pay at least the minimum payment to avoid a late fee and penalty APR. By contrast, the grace period is the window of time you have to pay the balance on your purchase before you are charged an interest on it – generally about a month from the date on the statement.

  1. Read the Fine Print.

You want to understand exactly what you’re getting into and the accompanying fee. A few things to be on the lookout for:

  • Over-The-Limit Fee: A fee may apply if you swipe more than your card permits.
  • Annual Fee: Some credit card issuers charge you a fee to be an account holder.
  • Cash Advance Fee: Avoid ATMs at all cost, or you’ll pay a hefty fee to borrow – and in many instances, a higher APR. Plus, a grace period may not apply.
  1. Monitor Your Credit Report.

The best way to responsibly rebuild your credit over time is to make timely payments, keep the balances low, refrain from opening too many accounts at once, and most importantly, monitor your credit profile to ensure the accuracy of the contents of your FICO report.

You can retrieve a free copy of your credit report from each of the credit bureaus once every year at You can also sign up for free credit monitoring services, such as Credit Sesame and Credit Karma, which provide instant alerts anytime that activity takes place in your credit file.

Bonus Tip:  Do not get a second card until you’re safely out of college!

A Final Thought

Credit card debt is super easy to get into, but virtually impossible to get out of if you use your card(s) irresponsibly. So be proactive about responsibly managing your card from your first swipe to the day you decide to add others to your arsenal.

The article Treat Your First Credit Card With R-E-S-P-E-C-T! originally appeared on CentSaiAdulting.

Teen Jobs: Think Beyond Fast Food Counters

•Your parents have finally given you the green light to get a job and earn your own money. Awesome! But wait – where do you start? Do you head down to the local fast food joint where all your friends are working, or dig a little deeper to find more interesting opportunities?

Exploring Your Options

There are tons of employment opportunities for teenagers, which is great news for you. However, the volume of positions may be limited, depending on your area of residence. Here are some possibilities to consider:

  • Cinemas (i.e. concessions, ticket window)
  • Event Planning
  • Auto Detailing
  • Tutoring
  • Hospitality Management (i.e. hotel customer service representatives)
  • Food and Beverage (i.e. food service)
  • Newspaper Delivery
  • Clerical Work (i.e. bookkeeping, filing)
  • Retail (i.e. cashier, sales representative)
  • Summer Camp (i.e. lifeguard, camp counselor)

And if you’re skilled in a particular area, such as childcare, writing, or landscaping, don’t be afraid to put your creative talents to use to rake in the dough.

The Benefits of Working

Beyond the almighty dollar bill, there are several benefits of getting your elbows greasy.

For starters, you’ll learn how to effectively manage your time to ensure that your performance in the classroom remains up-to-par, despite the new addition to your schedule.

(If you find that your schedule is too grueling with a part-time gig during the school year, a summer job may be a more viable option.)

Another valuable benefit of working as a teenager is getting experience. It can serve as a great resume-builder – both for future employment and for college – while helping you sharpen your communication skills.

Plus, you may even meet a mentor or two who can assist you down the road with your academics or entrepreneurial pursuits.

If you’re fortunate enough to get your foot in the door with the right employer, you may discover a passion that you didn’t know you had.

What to Do With Your Hard-Earned Cash?

Before you land a steady job and receive your first paycheck, you need to start thinking about what you’re going to do with your newfound wealth. (Chances are you’ll be far from wealthy after one check, but you never know what the future holds).

That’s where financial goal-setting comes in.

A budget will tell you where to spend or how to allocate your money, but financial goals will explain why.

Perhaps you want to save for a car, build a nice cushion, fund next year’s spring break trip, or buy a new iPhone. Regardless of the objective, you’ll need to acknowledge it as a financial goal and come up with an action plan to actually reach the finish line.

Dealing with Taxes

Like it or not, you’ll have to pay Uncle Sam – also known as the Internal Revenue Service (IRS) – what he’s owed to cover your tax bill. The good news is you’ll only have to file a return if you meet any of the following criteria:

  • Your earned income is greater than $6,300.
  • Your unearned income is greater than $1,050.
  • Your gross income is greater than either $1,050 or your earned income of up to $5,950, plus $350 (whichever number ends up being higher).

You can read IRS Publication 929: Tax Rules for Children and Dependents for additional information.

Beyond standard payroll taxes at both the federal and the state level, the following will also be deducted from your paycheck:

  • Federal and State (if applicable) Income Taxes
  • Social Security Taxes (FICA)
  • Medicare Taxes (MED)

Now that you’ve figured out how to land a job, set financial goals, and dealt with taxes, it’s time to devise a spending plan to make your hard-earned dollars work for you.


The article Teen Jobs: Think Beyond Fast Food Counters originally appeared on CentSai Adulting.