Q: I am in college. I don’t have a credit card yet because, as a younger person, I know that I will probably want to buy [unnecessary] items. Have I made a bad move by not having a credit card up to this point?
— W. Moody, Via e-mail
A: You remind me of one of my best friends from high school. Ronald was always serious about saving a portion of every dollar he got. He did not spend money on junk food, record albums, or the latest clothes. When we went off to college, he ignored the credit card offers, while the rest of us jumped at the chance to get as many cards as we could get. He didn’t always have the latest gear, but less than six years after we graduated from high school, Ronald purchased his first home. Also, Ronald had good credit and no debt. He was only 24 years old.
You are doing exactly the right things: saving a portion of every dollar you get and resisting the pressure to spend more money than you have. If you can maintain your habit of financial discipline and you really feel the need to have a credit card, get only one, with the lowest interest rate available. Keep your monthly balance low, so that you can afford to pay it off in full (instead of just making the minimum payment) each month. Most importantly, see using a credit card for what it is: borrowing money to buy something. If you have to borrow money to buy it (a home being a notable exception), then you can’t afford it.
You are off to a great start. Stick with what you are doing and learn as much as you can about the true principles of building wealth. Start by going to blackenterprise.com and downloading a free BE Wealth Building Kit. You’ll be a millionaire while your friends are living from paycheck to paycheck.