When it comes to credit, most of us were told use it only in the case of emergencies. The truth is that's not even half true. The very systems we are a part of have leveraged credit for ADVANCEMENT! And done the right way, you can too.
I was approved for my first credit card at 15 years old. Yes, 15!
Honestly, who gives a 15 year old a credit card with little financial education and a zest for fashion. The answer - the retail store where I worked part-time after school 3 days a week. My store manager said I could use the card to get the "associate discount" just make sure to pay it off every month. And so, I did.
I had no idea this activity was attached to my social security number, let alone that it was reporting to my "adult-ish" report card and alerting others of my money habit. When my Gramp found out that I had
been funding my stylish wardrobe with a credit card he immediately reminded me staying in style was not an emergency (lol) even though I made several arguments of why it most definitely was. What my grandfather was trying to explain was the things I was using credit
for were liabilities that offered no ROI (return on invest). His favorite phrase to me was, "when my money marches out, it needs to return with friends". The only place my clothing was marching to was through the hallways of my very preppy-stylish, #20 in the country high school.
So what is the real truth about credit? First, credit is leverage. Credit can be the gateway to greater opportunities for your personal life as well as business. The real 100% truth about credit is, consumer credit when used properly can be an asset rather than a liability. Assets appreciate in value over time (a home) whereas liabilities either depreciate or have no future value (average car and clothing). We'll get in the debate of assets vs liabilities in a future blog, for now you have to understand the value of your credit, become so financially literate about it that when you're ready to check out for your purchases, you are making an informed decision. Check out my next post on how consumer credit is calculated.