Credit cards can seem like a double-edged sword. On the one hand, they offer the convenience of cashless transactions and the potential for rewards. On the other hand, they can lead to debt and financial trouble if used irresponsibly. When used properly, credit cards can be excellent tools for young people to establish good credit and build strong financial foundations for their futures.
Credit cards help young people build positive credit histories.
Credit history is a record of your borrowing and payment activity. It is used by lenders, landlords and other financial institutions to evaluate your creditworthiness. A good credit history demonstrates that you are responsible with credit and can be trusted to repay borrowed money on time.
“Getting a credit card is an easy way to establish a credit history and begin to build a solid credit score,” points out Amy Fontinelle on Investopedia.com, “Plus, a credit card is sometimes required for things like renting a car or booking a hotel room. Young adults who don’t have enough of a credit history to get a conventional credit card can start out with a secured credit card.”
Credit cards allow young adults to earn rewards.
Many credit cards offer rewards programs, such as cash back, points or miles for every purchase made with the card. These rewards can add up quickly, especially if you use your credit card for everyday purchases like groceries, gas and entertainment. Some credit cards also offer sign-up bonuses, which can provide significant boosts to your rewards earnings.
While rewards should not be the sole reason for using a credit card, they can be a nice bonus for responsible cardholders. By using your credit card for purchases you would make anyway and paying off the balance in full each month, you can earn rewards without incurring interest charges or debt.
Credit cards help young people to learn about budgeting and financial management.
By using a credit card responsibly, you can learn how to track your spending, make payments on time and manage your credit limit. These skills are essential for building a strong financial foundation and can help you avoid financial mistakes in the future.
“Before you apply for a credit card, determine the monthly payments you can afford,” advises Equifax, “What’s your monthly income? If you’re in college, do you need to budget for books and food? Remember that you need to adjust your spending to match your situation. If you’re paying your credit card bills with income from a job, and you need to work fewer hours during exam time, for instance, you will have less money to spend.”
Do you accept credit cards at your place of business?
At Priority Pay, we proudly offer Canadian merchants a variety of high-quality payment terminals to choose from. You can easily and securely accept contactless credit card and debit card payments with the Poynt C Smart Terminal, the Newland 910, the Ingenico Desk 5000 or the Ingenico Move 5000.
To learn all about your options, please don’t hesitate to call us 1-888-431-4344. You may also email us at info@prioritypay.ca or request a quote on our Contact page!