Using charge cards to build credit

By Lane Luckie - bio | email

LUFKIN, TX (KTRE) - Retailers are offering deep discounts and ultra-low interest rates for credit cards. It's a formula that lures many young people to use credit instead of cold hard cash. The dangers of bad credit are always there, but some East Texans are actually using charge cards to establish and build credit.

Credit is the payment of choice for more and more young people. Chuck Watkins works at Buckle in the Lufkin Mall. He, like many of his customers, uses a charge card to establish and build credit. "I absolutely had to have some credit starting out. For college kids, that's the easiest way to go about building your credit for life, while you're in school."

Something Watkins said can be easy, if you follow some rules. "Definitely have a budget and keep up with your payments on time."

Once you have built credit, it is increasingly harder to keep it--especially with bargain sales and lower interest rates.

Watkins said some of his friends are experiencing buyer's remorse after their spending got out of control. "[They are] 23 years old. They have everything in their parents' name and can't do anything for themselves. They can't even get an apartment."

Credit Counselor Doniece Smith said a growing number young people are experiencing bad credit. It's something you can fix using a free credit report. "It explains in detail what you did good, what you need to do, what you should have done. It's specific to your credit report instead of speaking in generalities.">>

Rebuilding your credit will take time and include setting measurable goals. "Contact each former creditor and find out what the balance is and what their terms and conditions are for pay-off. Pay if off, and then wait," said Smith.

Those are tips Watkins said he has followed once before, however, his best advice came from his mom. "She always said never to spend the cash and the credit, it's always has to be one or the other."