In high school, college, and even in law school, the last thing on Cole’s mind was building credit by using a credit card. Like so many others, his family warned him about what could happen if you used a credit card irresponsibly.
Cole also felt that since he wasn’t earning his own money, having a credit card didn’t make sense for him. Without a bigger income to support himself, he thought there was too much risk associated with a credit card. Debt, interest rates, and low credit scores were on his mind.
“I didn’t even think about getting a credit card in high school. And in college and at law school, it still wasn’t something I felt like I was ready for or interested in,” Cole told me. “It honestly made me kind of scared. What if I didn’t pay my bill?”
Cole’s thought process isn’t uncommon. He attended Haverford College and law school at Columbia, which were stressful enough by themselves. He didn’t feel like throwing a credit card in the mix was going to help anything. “I knew that technically it’s easy to tell yourself to only spend money that you have, but that’s way easier said than done. Especially when a credit card gives you the ability to spend even more.”
It’s true, and the student credit cards on the market aren’t much help. With high interest rates, confusing fees, and the ability to rack up big bills, it’s easy to see why so many students don’t see them as a viable option.
But while he never wanted to get a credit card in college or law school, he does have one now that he’s graduated and working at a law firm. However, his worries haven’t just evaporated. Credit cards and money in general still make Cole a little uncomfortable, even with a job as an entertainment lawyer.
I asked him if anything has made him more comfortable with his finances over time. “I love the idea of being able to pay off my credit card whenever I want. I don’t want to be stuck with a big bill, so when I learned I could pay it off whenever, I felt a lot better.” Needless to say, that’s one of the biggest benefits of a Fizz card. To use Fizz, your bill must be paid off every day from your connected bank account. You don’t even have the option of building up a big bill over time.
When I asked if he would have done anything differently during his years as a student, Cole said he wished he had started building credit in college. “Something like Fizz would’ve made me feel better. It also would’ve been a lot easier to explain to my family.”
The conversation eventually turned towards money in general, not just credit. I wanted to know how Cole viewed his relationship with money. “I guess I would say I’m decent with money. I don’t work with a strict budget but I certainly live below my means,” Cole explained.
He made the point that for him, college felt like one single bill. Since Cole lived on campus and would frequent the dining hall, he didn’t have to keep track of spending on groceries, utilities, rent, and other things that are a factor for him now. “Having to deal with rent and other expenses has made me better with money. Again, I’m not a huge budgeter, but I know how to put money aside for things that need to be paid for.”
Cole still feels like he has a long way to go, but since there aren’t many young adults that consider themselves financial gurus, I told him not to be too hard on himself.
“Honestly, I haven’t had much financial education in my life. Plus, I think that the younger you are, the less you feel like you need to have a financial plan in place,” he explained to me.
I also asked about investing and other parts of his financial picture. “I love my 401(k), but I don’t feel comfortable having my own portfolio yet. I feel like I’m not qualified to invest and I don’t know how to approach it. Plus, what if everything goes wrong? That’s a worry of mine, so stashing money in a savings account feels a lot safer to me even if it doesn’t make as much sense from a return-on-investment perspective.”
It’s remarkably easy to push financial planning to the side and not think about anything other than what’s right in front of you. But while it might make you feel better in the short term, you’re not doing yourself any favors by skipping out on building your credit score and investing for the future. Fizz was created to be the financial ally for young adults, so that no one has to feel overwhelmed or intimidated by their finances - and particularly by building credit.
I thought that Cole did a great job of putting his finances in perspective. While even he’ll admit he’s not the most financially savvy person out there, he’s working to become better. “My solution is baby steps. I want to become better with budgeting and better with my finances overall. That’s how I’ll overcome my worries.”
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