There are many perks for having a Credit Card, but here are the top 5:

• Easy money from cash back rewards - Most Credit Cards come with cash back rewards ranging from as low as 1% up to a general max of 5% for specified purchases

• Additional security - Unlike a debit card, a Credit Card has an additional layer of security...

• Emergency Funds - If you were to ever run out of cash, a Credit Card would provide you with access to funds in the case of an emergency. However, it is important to keep in mind that you can accumulate too much Credit Card debt and if you don't have the means to pay off the debt within 30 days, you want to limit the amount you borrow as most Credit Cards have very high interest rates on balances that are held for more than one payment cycle.

• Improve Credit Score - Credit Scores can easily be improved through the proper use of a Credit Card.

• Ease of Purchasing (online) - In most cases Credit Cards make it easy to make safe online purchases across pretty much any platform so you never have to worry about whether or not you're able to go through with a necessary transaction.

The broad answer is “as soon as possible”, assuming you know how to use it and you don’t have one yet. Assuming you know how to properly use a Credit Card, there is no real right or wrong time to open a Credit Card. However, it is beneficial to know if there is any initial cash back rewards for an initial amount spent within 90 days of opening the Credit Card. Based on the amount needed to be spent in the 90 day period, it can beneficial to wait for one of the below circumstances:

• Before paying for a vacation

When I was in my sophomore year of College, I wanted to travel for spring break. I had a family member I could stay with for free in Florida. I researched plane tickets and assumed my trip would cost me about $500 for the 4 days I wanted to be there for. The issue was that I wouldn’t have $500 before spring break rolled around.

• Before incurring a big expense

Opening a new Credit Card can come with initial perks in addition to the general cash back. In most cases this will look something like: "spend $(specific amount) within the first 90 days of opening the account and get $(specific amount) in cash back.

When it comes to taking on a new big expense, or when life just kind of happens and now you need a new set of tires, it may be beneficial to open a new Credit Card to lessen the financial burden of the new expense.

Knowing how to properly manage a Credit Card is the difference between ending up in a cycle of crippling debt or receiving a random check for $100 or more every few months from the Credit Card company. 

These are the guidelines needed to properly manage a Credit Card:

• Only open Credit Cards you plan to keep open for extended periods of time - The average age of a credit account affects your Credit Score. The older the average, the better. Opening a ton of new Credit Cards is NOT a good idea. Every time you apply for new credit it will drop your Credit Score by 5-10 points for about a year. While this is seemingly not a large change, applying for multiple Credit Cards in a short period of time can have a more negative impact on your overall Credit Score. The key takeaway: Open new Credit Cards sparingly.

• ALWAYS pay off the full STATEMENT balance - This single act is the make or break for proper Credit Card management. Being able to pay off the entire statement balance month after month is the only thing that makes it possible to receive the full benefits a Credit Card has to offer, without incurring any additional fees. Doing anything else will negatively impact your Credit Score and it will cost you interest on the borrowed funds. There are two things that make this process easy to manage: 1. Auto Debit 2. Budgeting

• Auto-Debit is a MUST - The moment you get approved for your new Credit Card, take the couple of minutes needed to set-up auto debit. Make sure to setup auto debit for the FULL statement balance. Doing this will prevent you from incurring outrageous interest rates that are generally 25% and up. Setting up auto debit also ensures that you will not miss out on payments which will increase your credibility to creditors therefore, increasing your Credit Score.

• Building a budget / Monitoring how much you spend - Building a budget is easy, but following one can be difficult for some individuals. We have included a free budgeting template so that you can easily keep track of your expenses so that you DO NOT spend more than you make. 

The whole point of having the Credit Card is for the perks. If you can limit the Credit Cards you open to only the necessary ones, be diligent in setting up auto debit for the full statement balance and monitor your spending so you don't overspend, then a Credit Card will be safe in your hands! 

If the Credit Card is not properly managed, it can be very dangerous to your financial health. If you cannot, or will not monitor how much you spend, steer clear of any Credit until you are willing to do the basics needed benefit from having it.

• To get the most from your Credit Card - Assuming a Credit Card is the right choice for you, these are the best ways to maximize your perks:

For all of your everyday purchases, stop using cash and your debit card, only use your credit card. It only makes sense that you should only use your Credit Card to buy everything within your budget as it gives you cash back. If the cash back perks you receive are 1.5% then every time you spend on your Credit Card you save 1.5% of the total cost. In some cases, Credit Cards have increased cash back rewards for certain spending habits like 5% cash back on restaurants etc. It is good to know this, but it shouldn't be a reason for you to go out to eat on a night when you planned to save money by eating at home. Stay within your budget.