Originally Posted by
Happy
CC is not evil. It is lack of self-discipline that does people in when they spend above their means.
You may want to educate your 25 yrs old to learn how to handle her finance responsibly instead of taking the path of avoiding CC. It is advisable for young folks to build their credit history via responsible spending, such as having credit cards but pay off the bills every month... Unless you intend to shelter her for the rest of her life, she would eventually have to face the reality - that this society is built on credit, not on cash. That is just Econ 101. Money has to have velocity to produce wealth. Credit is an important way to generate that velocity. Using credit is not a bad thing - actually using credit judicially is a SMART thing. Using credit recklessly is a totally different matter. Avoiding credit is not the solution. She needs to learn how to handle credit and actually needs to carry 2 or more credit cards - charge them regularly and pay them off timely, so to demonstrate that she is a financially responsible person. This is important if she ever needs to apply for a loan - be it a mortgage or a small business loan when she grows older... I am saying the above from the angle of a former CPA and CFP. Such was my previous life. Even though our mortgages were gone more than 2 decades ago.
Now once again, back to our normal programming.
You're right here Happy. And the readers of this thread would be smart to read it again. Especially the word JUDICIALLY.
It's been mentioned in the cc churning threads many times. . .begin slow. I know the girl. Paperwork and accounts aren't her strong suit. You and I might love to play with numbers, not her. Life and death are what she's into. She has a lot on her plate as an ER charge nurse. She was excellent in math but too much accounting and desk work and she gets overwhelmed.
Timing is another factor. She's just into the job for a year. Lots of adjustments with moving away from home by her own decision to prove to herself and the rest of the world she could make it on her own. Found 2 other sensible young women in same ER for roommates. Big step in maturity there. Her aging car developed a costly repair so she looked into a new one while it still had a decent trade in value. My thought would to be for her to get a newer used one but she had her eye on a new one. Other than a modest rent it would be her only payment. Sometimes they just have to get a purchase like that out of their system. Called to thank us for financial help and guidance because she was thrilled with her credit score of 800.
Sheltered? Yes, to a point. But there's not much shelter with someone who spent 2 years as a nurses assistant on the neuro floor and now in a very busy ER.
Next step is travel nurse position. More life changes. The ST (
) Delta card was a new one for me so I'm planning to research it a bit to talk to her about it when she comes home for holidays. She uses debit cards and I don't know what kind of points hers gets. Credit cards can wait until the time and comfort level she's ready for them.
My sister, sweetest woman ever, never did get a handle on using cc's. DD has seen me help her out of trouble more than once. It was a life lesson that told her to be cautious and I think rightly so. People have to know their limits to managing debt and the accounting skills that go into playing with the cards. You got to know when to hold them, know when to fold them, know when to walk away and know when to run.