I was watching Dr. Phil yesterday afternoon, when he interviewed a young couple. They had become engaged, but the young lady hadn’t yet told her mother. But that’s not what jumped out at me.
During the course of the conversation with Dr. Phil, it came out that one of the young lady’s concerns about her fiance was that he didn’t have a credit card to establish credit.
While I agree that having a credit card can help establish credit, too often that’s the end of the advice. As a young person, I was told that I needed a credit card to establish credit. But the advice right behind that statement needs to be “Pay off your credit card in full every month, and don’t go into debt.” Unfortunately that bit of advice isn’t often talked about.
What Dr. Phil thankfully pointed out was that although the young man didn’t have any credit, he also didn’t have any debt. The young woman? Oh, she had plenty of credit….and $10,000 worth of credit card debt to go along with it.
Personally, I’d rather be in the young man’s position.
Photo by cncpt.
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I'm just an average mom, trying to live a frugal life and get out of debt. I write about things that have (and haven't) worked to improve my family's financial situation. What works for me may or may not work for you, and you should always consult a financial advisor before making important financial decisions.
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