Credit cards are something that a user is more likely to come across than investments. I remember someone had questions about them a while back on c/main.

APR - Yearly interest on money borrowed. It varies depending on your existing credit (or lack thereof) as well as what the credit company is offering. Usually when you're just starting out you'll get high APRs. This means when you borrow, there's high interest. That doesn't mean you shouldn't use the cards with high interest, just that you should pay it back quickly and be very careful what you borrow on them. Eventually you may get an offer with 0% APR for a limited time (several months or a year). It's important to note that cards will have variable APR meaning if you're late then the interest rate raises. This is part of why CCs can be bad.

Credit limit - How much you can borrow in total. Borrowing up to this limit can influence your credit score. You don't want to constantly be using a high percentage of your credit limit. CC companies will notice and probably offer to up your limit or send you new cards. This is predatory and you should watch out for it.

Annual Fee - Some cards require you to pay to use them. Not unlike banking fees. Try to avoid these cards if you can. You might have to deal with a few of them while building credit but at some point, but eventually you should get good enough offers that there will be no annual fees.

Credit Score - This isn't only tied to your credit cards, but anything you borrow. Using too much of your credit can cause it to go down. Getting a lot of cards at once can cause it to go down. If you don't use some cards, the CC company will close the account. This could also ding your credit score.

Simple strategy for building credit with CCs: Use them like a debit card but don't spend your cash. Put groceries and gas on a card, pay it off when the bill comes due. Rotate cards as you get more. Don't do any big borrowing unless it's an emergency. It will be tempting to use it on a big purchase, but don't. Once you borrow, if you can't pay it back immediately, the interest starts. And even with the interest free cards, you don't want to collect too much debt and then have an emergency put you behind. By paying off your cards immediately the CC company gets no interest. And if they get no fees either, then you win. You're a deadbeat because you pay off your stuff and they can't weasel any money out of you.

I don't know much about what to do if you have to max out a card for an emergency like dental surgery or car repair. I'd be curious about some strategies there if anyone has them.

Also, Obummer did sign a bill that made it so after 7 years, lenders have to drop the debt. But they will still hassle you the whole time. It's a tiny silver lining because at least it's not debtors prison and they do have to stop calling you eventually.

  • PurrLure [she/her]
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    edit-2
    4 years ago

    This might be a bit of a tangent but here's my personal experience with credit card debt:

    I worked in retail for a few years while living with my parents and still managed to accumulate credit card debt mostly buying small shit like fast food, Dollar Tree items and mobile gacha games. I thought they helped me cope with daily life. Was it fiscally irresponsible to spend more then I was making? Sure, but I was depressed and alienated. Every time I tried to switch jobs to improve my life it made the debt worse and made me feel worthless. Fuck I even tried selling crafts online, but the costs were so high and it basically made my tax refund vanish every year. Anyways, I eventually lucked out with a temp job that became a longer temp job at $15 an hour and only managed to move out with a new roommate's help. Had to save for months just for my half of the apartment down payment since I had to catch up on rent I owed my parents.

    By that point I had accumulated $7k in credit card debt. It took me about 2 years to pay it off. I only finished paying it a few months ago and had to immediately switch that money to saving for a down payment on a used car since my old one was starting to die. This month I finally bought the damn car and despite the new monthly payment my budget has eased up. I don't really know what strategy to give other than if you get lucky like I did and manage to get a higher paying job through a temp agency keep living like you work in retail. Learning how to cook is a life long skill and you can start on easier stuff like grilled cheese and salads (hah sorry I think my brain pulled those examples right out of The Sims). Cooking can save you money and help you get the nutrients your body needs to function normally. And if some other piece of shit fellow temp worker dares to make fun of service workers and makes chud "jokes" like, "If they paid everyone $15 dollars what would be stopping me from leaving this job and working at Mcdonald's? They have it so easy!" hold back the urge to start a fight with them because those shitheads aren't worth losing your job over. Just shoot them the dirtiest look you can and then wait a few days to key their car when they park in a spot away from the cameras in minecraft. Oh shit sorry we were talking about credit card debt, my bad. I also heard about the debt snowball method which involves paying off your debts from smallest to highest without considering the interest rates, but since I only had credit card debt to worry about it didn't apply in my case. I've heard good things about it though.