Credit Cards

A lot of people have credit cards now a days. People use them for online purchases, quick trips to the grocery store, and everything else in between.

The primary reason for this is because we are so used to managing our debt, purchasing something that charges our credit limit is easier to manage than using a standard debit card or cash. Also, it’s convenient.

We carry our wallet, phone, and one or two cosmetic items in our pockets at all times. When we are walking past a store and spot that shiny jacket in the fall time, it’s part of an essential purchase and a $150 jacket taken from our $300-$500 credit limit is within reason.

Let’s say the average person has around $2,000 in their checking account, charging it to their credit card and making a payment later is way more convenient than taking it out of the checking account instantaneously.

The other reason is it’s easier to maintain our cash flow. Every time we want to get that $5 coffee or go out with friends {-$38.07} – {-$157.38} with an average credit limit of $300 it’s easier to charge everything to your credit card and assess the damage in the next billing cycle. Not to mention if we do decide to pick up that jacket, you’d be looking at a total of {-$287.37} almost maxing out your card just by one outing/shopping trip.

Having that $2,000 in your checking account I would recommend investing around 20% in stocks that you’ve monitored, and an additional 30% in savings. That way, if you run into any trouble, you can sell a few shares to make up the difference as well as keep the stock market flux healthy.

Stocks are something I’ve always found the best way to save your extra cash. I once had three shares in Abercrombie totaling {-$54.21} and when I was going through my job transfer waiting for three weeks for my first paycheck, I sold all three of the shares to fill my gas tank {-$28.37} and I even had some left over to pay my minimum on my credit card {-$25.97}.

Credit cards are something that can be overwhelming, but if you have a set budget and control, they can be easy to manage and you can monitor yourself with your stock investments, selling/trading an average of two to five shares per month.

Adding housing to that, let’s say you have a home loan of {-$680,278} and a credit card limit of {-$2,500} moving expenses and furnishing would run anywhere between four thousand to six thousand. Being able to charge a portion of that to your credit card, can make your credit store increase or fall depending on your responsibility with the payment.

Managing your home loan as well as credit card debt is essential to any budget. When you add investing on top of that, having that 30% in savings comes in handy especially with a bank like Bank of America who offers their Merrill Lynch division to help you invest. So, your $600 in savings could potentially see a 200% growth depending on your investment portfolio. That could wipe out your credit card debt if your limit is set at $300-$500.

That being said, if you are careful with how you manage your loans, credit-card debt, and investing, you might be able to actually show profit with your usage of credit cards. That’s for that $150 jacket that will keep you warm that your coworkers will give you compliments for. Maybe it might score you a Tinder date so you’ll get a nice dinner and movie treat; that would be $150 well spent (or {-$357.38} if you’re good with investing…