For the fashion designer or fashion student who plans to work in an industry that relies on consumerism, keeping your credit intact in this shaky economy is more important than it ever has been. With both business and personal expenses at hand, some tips to maintaining a decent credit balance will hopefully guide you safely in 2009:
· Use only 25% of your credit limit for personal purchases. One of the most important basics to financial control is not using up your monthly credit limit in the first place. Keep the personal purchases through credit to a minimum—purchasing those Louboutin pumps will be so much more satisfying if you’ve saved up for them in cash.
· Use another 25% of your credit limit for business-related expenses. Face it, getting a head-start in the fashion industry is pricey, unless your last name is Warbucks or you’re Karl Lagerfeld’s long-lost child. Investing a quarter of your credit limit into your career will benefit you in the long run, as you gradually build up the necessary tools for furthering your career instead of spending it all in one lump sum.
· Don’t put food or gas on your card. If you can pay in cash, pay in cash.
· Get a loan if you are in dire need of a large sum of money. Interest rates on credit cards are high enough already. In other words, if you do not pay it off in full every month, you will only be hurting yourself.
· Pay for expensive items in cash. One Prada purse and two Cartier watches can really add up. So can plane tickets to New York City—even if you’re just there to visit the fabric showrooms.
· In fact, always have cash at hand. Think of your credit card as an “emergency” card.
· If you really do not like to carry actual dollar bills with you, use a debit card instead of a credit card.
Know that every time you apply for another credit card they run a credit check on you and that knocks down your credit score. Investigate your score on your own with www.freecreditreport.com, but do not go crazy as consistently running your credit has long-term effects to your history. Having some things charged and paid off proves responsibility; therefore using the credit card sparingly is more of a positive than a negative for your credit. And for your records, the highest score on the credit report is 850 (the lowest is 300) anything under 500 is considered a risk by lenders.
Remember, the money you charge on your credit card is still your money—eventually; you have to pay it off.
-Noel Duan
0 Response to "Credit Cushion"
Post a Comment