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The following is a WalletHub interview with Associate Professor of Economics and Director of the Center for Economic Education (CEE) Dr. Sahar Bahmani. Link to Wallethub article: https://wallethub.com/credit-cards/first/#Sahar_Bahmani
What was your first credit card? How was the experience? What would you change?
My first credit card was at the age of 19 when I was at the University of Wisconsin at Madison. The experience was confusing because I spent a lot of money on textbooks, and when the bill arrived, it showed me only the minimum payment that I owed which seemed to be very low. I called my father, who is also an economics professor, and told me that I must search for the total balance. It's important, he said, to always pay in full and on time. It shows you are responsible, good with money and in turn builds good credit. I think it's great to have a credit card, especially to accumulate points, but I recommend check cards for younger people because it's an automatic transaction and deduction right away from your checking account.
When do you recommend people get their first credit card?
I think it's important for parents to put their child on a credit card with the parent around the age of 16-18, before the child leaves home, so that they can learn and see how a credit card works, while their parents also monitor the activity and give good advice. To get your own first credit card by yourself, 18 is a great age because it teaches you how to pay in full and on time, to build good credit.
What advice do you have for someone getting their first credit card?
My advice would be to be very careful with the way they use their credit card. Since it is not at all an automatic deduction from any account, it's easy to rack up a lot of purchases and debt on this small piece of plastic. I would highly encourage people to not spend money that they do not have and to call the credit card company and bring down their credit card limit -- this is a good way to discipline yourself. Companies are quick to give a high credit card limit because they want to see you spend.
Do you think credit card companies take advantage of first-timers?
Yes, credit card companies do take advantage, in my opinion of first-timers. Especially the font and bold way they highlight your minimum payment and that you have to keep a close eye out to discover your total amount that you actually owe. Of course, they'd rather see you pay the minimum payment, rather than the full balance itself so that they can charge an interest penalty. I strongly believe that they should be upfront with how a credit card works and the various "traps" that first-timers can easily fall into.
Is it ever too late to get your first credit card?
No, it is never too late to get your first credit card.