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Checking vs. Savings account, and credit card?
Checking vs. Savings account, and credit card?
I am 18 years old and have been managing my money by using my debit card and my checking account. Every night, I check my online account to make sure my purchases and deposits are being documented, and I keep track of this in my checkbook. I have been managing my money on my own since I was young, but have only been using a checking account for a few months. As a new college student, at what point should I consider getting a credit card, if at all? I am saving quite a bit of money and handling my finances well, but I feel that I will be able to handle having a credit card, simply because I will not overspend but I would like to establish a good credit rating rather than having no credit at all. I am on a full scholarship so I really don't have any loans to pay off or anything.
Also, should I open a savings account in addition to my checking account? How can I determine how much money to put aside in savings vs. checking? I do my banking at Commerce. Any advice would be great!
Answers:
Be very very careful with a credit card. They can be good to have in case of an emergency, you know, those months where your spouse gets laid off and it turns out you need a new well and your car engine blows. But, way too many people abuse their credit.
If you're going to get a credit card, try to get it through your bank. You can probably set it up for automatic payments. Just about any credit card I have has the option available to automatically pay off the total balance every month. About the best thing you can do with a credit card is select one thing each month you're going to use it for and pay it off as soon as the bill posts. I use one of mine to pay my electric bill, then I pay it off as soon as it posts to that account.
2007-07-01 21:46:26
Jim H: I think it's a great idea for you to establish a savings account, and you might want to consider placing it at an online bank that is safe but will pay you more interest. Examples of such places are ING Direct and E-Loan. You can set them up online and transfer money back and forth between accounts. Do know that there may be some restrictions as to how many transfers you make in a month, how long the money has to remain in an account prior to transferring, and how long the transfer will take.
As for a credit card, it might make sense for you to get one to establish credit, BUT only charge something for which you already have the money, and pay the bill off IN FULL as soon as it comes! Do not EVER carry a balance... it's much easier to get INTO debt than to get out of it!
2007-07-02 00:04:36
For credit cards i would say get it but since your still 18 u will have time to begin establishing credit somewhere in the future. I suggest wait a couple of more years and build credit in other ways such as paying off your phone, electric and other bills under your name on time and make sure to not overdraw your account.
2007-07-02 00:55:31