This is a series I put together to share my parents’ frugal habits. My family grew up poor, but it never felt like it to my sisters and I. It was only when I grew older that I realized how much my parents had to scrimp and save, in order to give my sisters and I the life we have now. Some of these stories are funny, some sad and I hope that some may also warm your heart.
I got my first credit card in first or second year university. My parents had warned me against signing up for a credit card with some random company and insisted I didn’t need a credit card. I refused to take “no” for an answer, and they brought me to our TD Canada Trust branch to talk to an advisor to open a credit card.
Of course, I got the “Student Green Visa” with a $500 limit. I was ecstatic! 🙂
I didn’t know a thing about what a credit card was. I just really wanted to “build up my credit”. When I didn’t even know what it really meant.
My parents knew that I could get into big trouble with a credit card, but they also knew that I would get one sooner or later. So, instead of having me figure out things the hard way, they just me that I could use a credit card but I had to pay it off IN FULL every month.
When I asked my dad about the “minimum payment” amount, he told me to ignore it and pay it in full. That was the ONLY way to use a credit card.
And so, that’s what I did. For all of my university career. I paid off my credit card each and every month. To me, it was like getting a month of free loan that I had to pay back the next month.
It wasn’t until my first in year into working full-time that I realized that a credit card was a loan that I could take as long as I want to payback (at ~19% interest!). That’s when I realized how easily I could have slipped up and got myself into a lot of debt, if I wasn’t careful.
My parents use their credit cards as debit cards, paying them off every month in full. And that’s what they taught me, too. Even though, I didn’t know the full capabilities at the time I started using my credit card, I think it was for the best.
When did you get your first credit card? Did you fully understand what a credit card was? And did you pay them off in full every month?