Should college students and teens possess credit cards?

Credit card debt is one of the biggest problems and year after year, there are millions of people who find themselves knee deep in debt. As the interest rates start soaring higher, the payments get missed and this has an overall bad impact on your credit score. While it can be financially traumatic to carry huge loads of credit card debt, credit plays a vital role in our lives. Would you like to purchase a house? If answered yes, unless you have enough money in your bank account, you will require financing it through a lending institution.

Above all, you will need stellar credit rating in order to get the loans that you wish to. How are you supposed to build credit rating if you don’t use credit cards? If you don’t take out online installment loans, you won’t be able to build credit rating. So, let’s read on to know more on young people and debt.

Debt and its impact on the young generation

Once a person turns 18 years of age, they can qualify for their own credit cards and loans and hence they become primary target for the lenders. Since they’re the ultimate vulnerable generation, the lenders are eager to get them into business. This is why most college campuses are filled with credit card vendors and banks which give away freebies so as to attract the younger adults to apply for credit cards. But the young people should be aware of few things before saying ‘yes’ to credit cards.

The biggest problem with applying for their first credit card is that they don’t focus on the terms, interest rates and other features of the card. If they choose the wrong card, they may prepare themselves for failure from the very beginning. There are almost many who aren’t educated about debt and credit cards. All they know is that they have to pay back the money but they understand very less on minimum payments and interest rates. This is when things get out of control.

What makes students apply for credit?

Despite all the negative upshots of credit card debt, there is no doubt about the fact that all students need a credit card. The primary reason behind this is to establish a positive credit history. Being a teenager, you have to build a credit score and hence for that having a credit card is necessary. But that doesn’t mean that you can use your credit cards in any way you want. You have to be sincere about the way you use your cards. Suppose you take out online loans from paydayme.com, wouldn’t you try your best to pay them back on time so as to avoid building debt? Similar is the case with credit cards as non-ability to make payments on time will lead to high interest debt.

Therefore, if you’re a teen, you’ve got to be responsible about your finances, especially about your credit cards. Use them properly so that you don’t incur debt.

Avoid shady lenders and loan scams – How to remain aware

There is no doubt about the fact that the internet makes everything easier and you should deem yourself to be tech-savvy if you want to accomplish tasks online. With the advancements in the fields of technology and the development of apps, everything from paying off your bills to ordering your pizza can be done online. However, did you stop to think that ordering a loan online will have higher stakes as because you need to provide private financial information to people whom you don’t know.

The safest way in which you can borrow money online is by ensuring that you’re dealing with a reputable and trustworthy lender. You also need to watch out for the red flags so that you don’t run the two major risks which are:

• Ending up paying a hefty amount: Even though you may grab a loan, you may end up paying a huge amount if you take the loan from a shady lender. On the contrary, if you could take the loan from a reputable lender, you will get the same loan amount for less money.

• Losing money: This is a real risk which has to be avoided by any means. The fake lenders can easily claim the world and charge fees for approving the loan. At the end, you never get what you paid for.

Choosing the right lender

Dealing with a reputable and legitimate lender will safeguard you from several issues. Do your homework by researching on the lenders, reading their positive and negative reviews so that you can get a clear idea on how they help you. You need to keep in mind that everything that you find on the internet is not true. Hence, it is best if you could lend from a lender who is trustworthy and reputable.

Before you hurry up for submitting an application, make sure you check for complaints with the CFPB or the Consumer Financial Protection Bureau which maintains a database of complaints regarding financial products. All these complaints are posted online within a fortnight. As long as reputable referrals are concerned, you have to ask your family and friends who have borrowed. Ask them how things went with regards to the loan program. The closer is your source, the more confident you will be about the reference that he gives you.

You should avoid sources which are less reliable like the following:

• An email out of nothing: If you receive an email where a shady company asks you to take loans from them, don’t fall for them. Spammers usually send such mails to millions and the same is true for someone who comes down at your doorstep for loans.

• Phone calls which are unsolicited: Do you suddenly get calls from a blocked or unsolicited number? Even though it seems that you get the call from a local number, you should avoid such calls as they’re mostly scam.

So, if you’re someone who is eager to know about the different ways in which you can choose a trustworthy lender for your loans, keep in mind the above listed points.

Common Financial Worries Families Face

As you grow older, you start to learn that there are many responsibilities as an adult. With those responsibilities tends to come concerns and worries. It could be anything as small as what you’re going to do on the weekend to something more significant like the future of your family.

One worry that is quite common for many families relates to their finances. At one point or another, you’ve probably caught yourself worrying about your financial situation. Money tends to be one of, if not the top concern for many.

What about finances that make families so concerned? Take a look at some of the common financial worries families face.

Unexpected Expenses

The unexpected is something that can make even the strongest person worry, especially when it comes to finances. Even if you have an emergency fund and are prepared for any expense thrown your way, you’re likely to be still somewhat concerned over if you can or cannot afford it.

A 2017 study from Bankrate found that 24 percent of Americans have no emergency fund set up in case of unexpected expenses. However, only 31 percent say they have enough of a cushion to cover six months of expenses.

Preparing for unexpected expenses can be tricky. For starters, you may need that money right at this moment. However, if you don’t set aside an emergency fund, if the time comes that you do have unexpected expenses, it could throw you deep into debt.

Healthcare and Insurance Costs

A significant financial worry involves your healthcare coverage and insurance policies. Paying for coverage that you either rarely use or hope to not use at all can be frustrating. There are likely many other things that you could use the money for.

When it comes to things like life insurance, for many families it is a necessity that they budget for. Even though they know the expense is coming every month, they may still worry about if they can afford the coverage. If you’re in this situation, there are things you can do to help reduce the cost of your premiums. If you’re looking at getting insurance, shop around and get quotes to find an affordable policy.

Losing an Income

Losing an income can be catastrophic for many families, especially if it is your only source of an income. If you lost your job and didn’t have that income anymore, would you be able to continue with your lifestyle?

The concern of losing an income is a reality for many. However, it is one that could be prevented by that emergency fund mentioned before. Another way to protect yourself against this is by getting the right insurance to help cover expenses.

Paying Off Debt

Another big worry for many is debt. At one point or another in life, you’ve likely come face to face with debt. It could be big or small. Either way though, you're bound to worry about it.

Debt puts a kink in many families plans. It can prevent you from doing something you love or even getting a mortgage for your first home. Trying to pay off debt as quickly as possible is a big worry.