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How to avoid the fear of debt.

I have never been in debt but it terrifies me. I guess it's because I grew up poor. I have no credit because I won't buy anything unless I have have cash. I won't borrow money from anyone, I'm terrified to buy a house or a car. I make very good money with my job and have no financial burdens. What's the best way to build credit quickly? How do I get over this fear? Do you or have you ever felt this way? I have the financial ability to move out of my mothers house but I'm too scared. What can I do?

Answer Question
 
TiffanieK

Asked by TiffanieK at 12:17 PM on Mar. 14, 2011 in Money & Work

Level 17 (3,325 Credits)
Answers (14)
  • Get a credit card, the blue American Express is a GREAT beginner card. Use it for something simple, like gas only & ALWAYS pay it off. If you pay it off all at once, your credit will go up faster. If you only pay the interest, it will build credit but not much. They want to see that you're responsible with money, if you're responsible..pay your bills & credit cards, then your credit will soar. It's only when you can't pay that your credit can get kind of ugly.

    If you really want good credit, make large purchases & pay off the whole thing if you can.
    samurai_chica

    Answer by samurai_chica at 12:20 PM on Mar. 14, 2011

  • If you have bills in your name, then you already have credit.
    samurai_chica

    Answer by samurai_chica at 12:20 PM on Mar. 14, 2011

  • I started building credit by getting a Gas card. I got one when I was a teenager, and kept it paid down.
    gemgem

    Answer by gemgem at 12:22 PM on Mar. 14, 2011

  • If you have a contract cell phone, you have credit already. Otherwise - get a simple no annual fee credit card, use it once, pay it off immediately and then you have established great credit.
    twinsplus2more

    Answer by twinsplus2more at 12:29 PM on Mar. 14, 2011

  • Get a regular American Express card. You have to pay the montly charges in full mothly. They do not report to creditors, it only shows as an account being open. And an open Amex account carries more clout than anything else, because the credit limit is never known and not so many can keep it in good standing. It's the only card I have other than gas, and I've had it since I was 19. GL!!
    jewjewbee

    Answer by jewjewbee at 12:37 PM on Mar. 14, 2011

  • I would also say, don't get over the fear of debt. Keep it. And continue to live as you are by paying cash always, you are definitely headed in the right direction.At some point, you will see a bank balance that makes you comfortable, your subconscious has already found that point-and you will relax and start buying yourself nice things and move out on your own. I think you are doing great, don't live in fear enjoy and cherish your wisdom!!
    jewjewbee

    Answer by jewjewbee at 12:38 PM on Mar. 14, 2011

  • Don't get sucked into the credit card trap. That is a huge misconception. CC companies use it as a sales pitch. We were told this by our financial counselor. You pay them money, to use money. And when you go to close it out because you are tired of paying the interest, which needs to be paid whether you use the card or not, it hurts your credit score, by showing it's a closed account. So unless you are willing to keep the CC open permanently I wouldn't bother..

    There are ways to get to what you are trying to do a lot safer.
    Musicmom80

    Answer by Musicmom80 at 12:39 PM on Mar. 14, 2011

  • Retain that fear (to a point). It will serve you well in your financial life.
    Anonymous

    Answer by Anonymous at 12:48 PM on Mar. 14, 2011

  • It's a good fear, do not do anything to get rid of it.
    Candi1024

    Answer by Candi1024 at 1:03 PM on Mar. 14, 2011

  • Getting a credit card and paying off the total is absolutely a good way to get a good credit score. The key is to pay it off totally each month and only use it for things like gas, and groceries. You also have credit if you pay any utility bills, etc. You also want to save for an emergency fund. Ideally you should have 8-9 months of gross pay saved for this. Then you could save for a house downpayment. If you have these things in place you could buy a home and get out of your mom's place IF thatis your ultimate goal. Don't buy a home that is over your means. Shop with a reputable realtor and see what's out there. Make it a condo if you do not want yard upkeep but remember you will pay monthly condo fees. This is one of the best times ever to buy a home with low interets rates and low prices.
    elizabr

    Answer by elizabr at 1:34 PM on Mar. 14, 2011

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