accidentallyadrift

[accidentallyadrift]

Credit Cards and Finance Things: The Good, The Bad, and the Honest Truth

First off, if you’re dealing with an annoying mound of credit card debt you’re not alone. I used to swear up and down that I would never get a credit card...until I got to college. It was just one, with a manageable limit through my bank, but then it was two and then a Victoria’s Secret card and a Best Buy account, Amazon, American Airlines. It got out of hand quickly and now at 23 I’m still dealing with the repercussions of irresponsible decisions I made at 19. But, in dealing with all of the BS that comes along with credit cards and paying them off, my friends started asking me for advice with handling their own. Which seemed...Bizarre? Now initially I would have told you under no circumstances should you ever get a credit card ever! In reality this isn’t really a practical thing, and here are a few reasons why.

 If you have any plans to travel, rent hotel rooms or cars you’ll need a credit card. Most if not almost all rental car companies will not let you use a debit card when you’re renting a car. And if they do they increase the already ridiculous hold on your account and unless you have a major amount of liquid cash and you can stand to not access $400-$600 on top of your rental fees for the duration of your trip it’s a necessity. I’m often surprised at how many people don’t know this, the best man in my best friend’s wedding found himself stranded in New York City without a way to get to Vermont because the rental company they had booked with didn’t list that you had to pay by credit card and you had to be over 25. (Also age isn’t won’t always stop you from renting but it will almost always increase your rental price so check to see if there’s a young renter’s fee!) 

Certain hotels follow similar policies, and at minimum it’s always a good idea to have some way to cover your ass if you find yourself in a bind while away from home. Lost debit cards, emergencies, accidents, or traveling for work where you’ll be waiting to receive reimbursement from you employer are all things you could encounter where not having one is going to make for a giant pain in the ass. 

Different types of credit help you build a strong credit profile and no credit history can be just as frustrating to deal with as bad credit history. Credit Cards fall under the revolving debt category and help show that you can faithfully pay down or pay off a balance to a lender. They’re also how most people establish their length of credit history, which is a pretty large factor in your overall credit profile. Now, you don’t want just revolving accounts, installment accounts (usually car loans are where the average 20 something will pick this up) are even stronger for your credit profile and honestly look better than accounts with a revolving balance. Services like Credit Karma offer great break downs about all of this and how each type affects your credit scores. I highly recommend getting in the habit of checking your credit score on a regular basis if you don’t already. It’s free and it’s one of the first ways you can spot if something that doesn’t seem right shows up on your credit if you don’t pay for any kind of credit monitoring service. Having no credit history makes things like trying to rent an apartment or get a vehicle loan difficult. My current roommates previous roommate had no credit history or rental history and because that was viewed as a risk factor for the rental company their security deposit jumped to over $600 from $250. As for a vehicle loan you’re more than likely going to need a co-signer or co-borrower which can be difficult if you don’t have someone that is willing to put their name and credit on the line to help you.

Long story short. You need to build credit history some how, credit cards are kind of the path of least resistance to do so but I will say if you don’t think that you have the self control to keep your “emergency” card in your wallet for actual emergencies. I would suggest holding off. 

Your bank and local bankers are excellent resources for financial questions and concerns! You can always go in and chat with a banker about your financial goals or to seek some advice. Debt, budgeting and finances are tricky and no one is expecting you to understand it all so use the resources around you and don’t be afraid to ask for help if you need it. 

The best thing I can recommend is to be SMART about what you choose, stay away from store cards with attractive incentives. “But what about the rewards?! And the freebies!? It has to worth it” Absolutely not, this is just a great way to build up unnecessary excess debt, and trust me the perks don’t take the sting out of the 29% interest rate once you realize how much you’re paying back for your retail therapy. 

Airline cards have the worst annual fees and ridiculously high interest rates, if you do want something travel specific that you can build miles up on the only one I suggest is through American Airlines specifically their Fly Now Pay Later program. This can only be used to purchase flights and has 6 months interest free financing on all of your flight purchases, you still earn miles and it’s tied to your frequent flyer number. Over all, this is a card I plan on keeping because it allows me to grab flights at any time when the prices bottom out because we all know that great deal won’t usually stick around till your next pay day. Just make sure to pay it off within that 6 month window and you’re good!

Really you want to look for a card that gives you cash back on your purchases, that you can either redeem for other things or you can roll back into your monthly payments. Personally, I have a Discover It card and although the interest rate is a little on the high side (which differs for everyone depending on your credit profile) it is nice that I can take whatever cash back rewards I have and roll them into my payment. 

If you’re like me and are dealing with multiple accounts and trying to tackle getting them all paid off. USE GOOGLE CALENDAR. I used to end up with late fees because I would space a payment and not realize it till the next morning when that stupid late fee had already been posted to my account. I wanted desperately to be an organized planner girl that could keep everything written down but it just doesn’t work for me, and I have to remember to write them all in every month and to be honest ain’t nobody got time for that. My google cal took me a bit to set up but the nice thing is, once it’s up you can set it to just auto repeat every single month until the end of time if you would like. Every single one of my accounts is listed on its due date, they start out green and when I’ve made the payment I go in and switch them to red for that month. If an account is paid off, I switch it to orange and just tell it to change all the following events to match.  Easy, simple, and no late fees. And since I get paid bi-weekly it really helps with pay mapping and knowing what I need to set aside to make sure everything is covered. 12/10 for the very visual planning type! Also, I know most banks have a Bill payer feature, I’ve just found that this is what works best for me. And if you’re like me and paying off multiple accounts tackle them one at a time! Make minimums on all of them except one, when that’s paid off move on to the next one. Everything is still getting paid but you’ll actually start to see productive results sooner. (This one came straight from my banker and let me tell ya it works!) Start with the smallest one and work your way up to the highest ones. 

Going Back to Pay Mapping, this is a great tool to tackle paying down debt and keeping your monthly budget on track. This allows you to sit down and see when you have money coming in and when money needs to in turn go back out to cover your bills and where you’ll need a little extra or where you’ll have some cash leftover. I usually pay map for a month out from wherever I’m doing my budget. Starting with my current account balance, adding in my upcoming paycheck, deducting all of the payments that will be made in that pay period until my next check and then adding that next check in and repeating the cycle. So I can see if one week I’m going to come up a little short then I need to keep some of my over flow cash from a previous week in order to make sure I don’t over draft my account. It seems simple, and you would think that it’s just basic knowledge...but again I’ve heard so many times “If I would have realized that I wouldn’t of done _____ last week!” The best thing you can do for your financial mind set is to alway be thinking forward, don’t let that extra 20 bucks burn a hole in your pocket if you haven’t checked to see if it really is extra. Better yet, just move it to your savings account (which you should also be dumping at least $10 in to whenever you can...I’m still trying to get better about this one myself).

And if you’re on top of it and pay your card off every month! Pay it off before the due date and then a revolving balance will never hit your credit report. Having accounts that are consistently paid off and don’t carry a revolving balance is the ideal way you want to deal with having credit cards. It looks great on your credit report that you pay faithfully, your usage stays low, and your still establishing length of credit history.

Wow okay this got much longer than I expected it to be but I feel like these are like the financial FAQs I usually get so now maybe I can just send it on as a master post the next time someone asks? But if any of this is unclear or you have other questions I’ll do my best to answer them! Again, by no means am I an expert this is simply a collection of things I’ve figured out through trial and lots of error. So if anything learn from my mistakes lol and if there’s anything you would like to add feel free! I’m always looking to learn more! 

Also, remember it’s not forever. It may be stressful and not very fun right now but if you keep working at it and you learn from it and you make sure you don’t end up there again. I know it can be incredibly overwhelming and it sucks when you have to make the choice to stay in and be responsible when all you want to do is go out and have fun. But, it’ll feel so much nicer when you know you’re doing it all cash and you don’t have to worry about paying for your fun at the end of the month. You got this! Now go color code your calendar and get that shit paid off!

[accidentallyadrift]

[accidentallyadrift]

crying,

breaking down,

falling apart,

venting,

wanting to give up,

hating life a little,

getting upset,

feeling self pity—

not childish. not stupid. not over the top.

we have bad days. we have emotions.

you’re valid. your problems are valid.

don’t beat yourself up over feeling.

[accidentallyadrift]

Welcome to the Current

Adrift

Adverb or Adjective

 / ə-ˈdrift /

1: without motive power and without anchor or mooring

2: without ties, guidance, or security

3: free from restraint or support

And if you’re a young millennial, Adrift is likely the feeling you’ve been floating in since you left the safe harbor of school. You set out into the world with big dreams and aspirations! You were going to conquer the world, live a life worth documenting on your instagram and it was going to be great. But it’s really...not. Maybe you can’t pin point exactly why or things aren’t living up to your grand five year plan or you checked all the boxes and things still don’t feel quite right. Regardless some how you’re still feeling a little lost or like something is incomplete and you aren’t quite sure why.

(Don’t worry I’m not glazing over the existential dread that accompanies the state of the world and all who inhabit it.) 

But, that’s not the main direction for this blog, not that it’s not important and worth covering, but there are individuals far far more qualified to give you that information. 

The purpose for this blog is to maybe make you feel like you’re not drifting through life alone. Maybe even offer a sense of community to those of us that feel like we are, give us a pod of Millennials that are frustrated with the daily challenges of life but also feel like we don’t have room to be openly frustrated because of the aforementioned state of the world and all who inhabit it.

Now this isn’t a space to mindless complain and I promise that’s not whats going to happen here. Sure maybe a little venting, but the goal is productive conversation.

So if you identify with the topic, let me know! Let us all know! Because we’ve all certainly been in a position where it feels like no one quite gets it, and sure things are okay enough so you don’t want to sound like you’re complaining, but dang this is really bothering you and you NEED to get it out somewhere. And you’re sick of someone telling you the reason for it all is the phone in your hand, the avocado toast on your plate and your morning cup of coffee.

If there’s something you want to talk about send me a message, even if I personally haven’t dealt with the same situation I’m sure there are plenty of people out there who know exactly what that rip current feels like. 

Welcome to the current, grab a lifeline and let’s try and figure it out together. 

Fair Winds Friends