Monday , 2 October 2023

Wealth 101: What Young People Need to Know About Credit & Debt

Today’s infographic…focuses on introducing the most essential ideas around credit and debt, especially with young people in mind.

The original article has been edited here for length (…) and clarity ([ ])

Credit is important for four key reasons:

1. Convenience
Credit gives consumers more purchasing power than their income alone. Most daily transactions occur using credit, and surveys show that 40% of people prefer spending using credit over cash or debit.

2. Future Planning
Credit provides opportunities to buy big ticket items like homes or cars. Items like these are difficult to pay for with cash alone!

3. Benefits
Credit often provides rewards for those that spend it wisely. For example, Air Miles or other loyalty programs are often tied to credit cards.

4. Emergency Preparation
Having extra financial means allows you to be prepared for any emergency, such as an accident or a hospital visit.

To take advantage of these benefits of credit, it’s important not only to understand how it works, but how credit can be built up over time. Securing a good credit score can be the difference between owning an important asset (house, car, etc.) or being denied by lenders. For these reasons, how you approach credit can have a ripple effect on your financial future, so it is crucial to adopt smart credit habits early on in life.

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Related Articles From the munKNEE Vault:

1. Simple Steps To Improve Your Credit Score – Quickly

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2. 3 Tricks to Repair Your Credit (FICO) Score

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