People don’t pick up good money habits naturally. Nobody goes around sharing how they were born with a (natural) talent in financial planning matters.
Financial prudence comes with a price. You either learn them from your past mistakes, or you are constantly updated with new tools and apps to track your monthly spending.
The majority of us will own our first credit card(s) once we join the workforce. And we’ve all heard the horror stories about how young Singaporeans have messed up their credit scores and are in credit card debts because of their poor money management habits.
When you start using credit cards as an adult, it also means you start spending like an adult. The expenses that we are talking about could amount to thousands of dollars on a gym membership, expensive fine dining, and Prada bags.
Is it a risk to pick up good monetary habits only when you reach adulthood? Here’s our take on why it makes sense to start owning a credit card from young.
Encourages Good Credit Habits
Many parents may not agree with this concept but starting young allows you to learn from your own mistakes. Young ones will start using their credit cards when handling small purchases like books, movie tickets, and food.
With a credit limit of $500 and no minimum income required, the early introduction of credit cards will expose you to the adult world, where you have to pay monthly credit card bills. It will most likely be your first experience with budgeting, learning new financial terms like Credit Scores, and scheduling bill payments.
To manage your credit card bills, consider downloading a free personal finance assistant such as Seedly. This app, which is available on mobile, allows you to quickly breakdown your credit card spending into various categories. You can see automatically how much you are spending each month for instance on groceries at NTUC across all your various credit cards without having to key in each entry manually.
The best part about Seedly is that it can even tell you how much you are saving each month, and what is the “best credit card” that you should be using based on your type of spending.
Prepare For Emergencies When Overseas
Students these days are given more opportunities to go overseas as compared to our parents’ era. It can be comforting for parents to know that their children will have access to emergency money during their vacation with friends or their overseas exchange programme.
For example, if they miss a flight, they can easily rebook one with their credit card. This is the same for unexpected medical expenses or even car rental while overseas. You can’t deny that credit cards have made parents’ lives much easier.
Rewards Help Save Money
Needless to say, the joy of using a credit card comes from the exclusive discounts we get from partnering merchants. The Citi Clear Card is well known for the fantastic dining deals at top restaurants in Singapore and free entry to Zouk Club.
For students who indulge in online shopping and travel frequently, the DBS Live Fresh Visa Student Card would be a good credit card to have. You get to earn 3 times the DBS Points on online purchases and travel bookings.
There is always a learning curve to deciding which payment mode or credit card can optimise your purchasing power. Such a skill set can be taught earlier when you are younger. As the saying goes, “Money is a tool. Used properly it makes something beautiful – used wrong, it makes a mess!”
Once you own a credit card, it is important to remember that this passport into the adult world comes with great responsibilities. As what Peter Parker would say, “with great power comes great responsibilities”. You should only swipe that credit card when you know you can afford to pay off the purchases.
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