💳 Your first credit card

What a credit card really is

Think of a credit card as the money of a person you don't really like that much, but who still lets you borrow from them. You have a relationship where you can borrow money — no problem. They're also "kind of nice" to you, letting you pay back only a small portion each month. But behind your back, they get angry — and demand that you pay extra money as punishment. I treat a credit card like a bag of money with a deadline. I can borrow from it, as long as I'm able to pay it back by my next paycheck.

Interest: the price of pushing the payment

When you can't pay the bill, there is a minimum amount you MUST pay. For every month you pay only the minimum amount, you lose money. Interest is the money you lose, as punishment for borrowing.

The main rule: pay the whole bill

When you borrow money from the credit card — it should be paid down in full by your next paycheck. Otherwise, you can't really afford to borrow the money. I know there are always exceptions in life, where you in certain situations are forced into credit card debt. But always try to pay down the whole bill, by your next paycheck.