Credit cards fundamental to financial stability

Establishing early credit is essential for personal economic development



Mark Gibson, clinical associate professor in the School of Economic Sciences, speaks about how those seeking to build credit should be wary of their purchases to not incur debt Tuesday in Hulbert Hall.

KADE RUSSOM, Evergreen columnist

Trust is the hardest thing to build in life. Well, trust and houses of cards.

It’s just so easy to be building up and up then suddenly something slips and the whole thing falls away, leaving no proof it ever existed.

Building with cards is a pain, but some are easier to build with than others. Credit cards in particular are great in this regard.

They’re relatively simple to acquire, give additional financial support when it’s required and, most importantly, are a strong foundation for building trust.

These cards help to establish a record of financial accountability, control and responsibility, all of which contribute to the trust one builds economically.

This trust is represented by a credit score, which helps or hinders an individual when applying for a loan. The amount provided and its rate of interest are directly affected by that score.

“One of the factors contributing to that score is the length of your credit history,” said Mark Gibson, clinical associate professor in the WSU School of Economic Sciences.

This semester WSU saw its largest first-year class in history. If those students were to begin establishing credit now, their credit history would receive a bump simply by having a long-standing record, according to Credit Karma Inc.

A credit score is important in securing loans for homes and cars, but such committed purchases aren’t typically the highest priority for young adults. It’s for this reason that a credit score is disregarded and any benefits it holds are simply left unused.

Yet many at WSU, save for a lucky few, are already looking toward years of repayments on student loans. With the use of a credit card, a greater range of loan offers and options will be available to cardholders, given they are proven reliable in returning borrowed money.

There is also the option to repay these loans with credit, but doing so only delays and ultimately increases debt.

Although there are many benefits to using credit cards early, there are risks as well if they are not properly managed. Major factors people consider when choosing credit providers are the interest rates and annual fees. These are ultimately the costs of using a credit card.

Missing payments will not only devastate one’s credit score, but will also lead to an additional charge and additional debt in the form of interest. These interest rates will often snowball, leaving the debtor to repay far more than whatever their initial purchase was worth.

But to avoid such circumstances, there is some rather simple advice.

“Don’t put anything on a credit card you can’t afford to pay off at the end of the month,” Gibson said.

Financial stability is one of those vague but supremely important ideas people strive for in life, like enlightenment or healthy romance. Just as there are monasteries and relationship coaches to help pursue those ideas, there are services and experts willing to guide you in all manners of finance.

Establishing credit is critical to attaining a strong financial state. To any students like myself who are just beginning this process, do all you can to research a credit provider as well as the techniques of how to handle it.

Generally, it is best to take offers of low interest with low credit limits. Functional and simple, a secured card, while requiring an initial investment, serves as a safe introduction to the credit process when beginning a credit history.

To any looking to establish a credit score early, whether for yourself or a child, a secure card is the safest and most stable kind available.

In finding a provider which fits your circumstance, a credit card will be the first step toward building a sturdy record of trust in the financial world. Though the specifics vary, a responsibly handled plan of credit will inevitably lead to personal benefit and a heightened financial status.