I turn 18 in less than a week, and I already pay ~$15 a month in subscriptions between Spotify and Nintendo (both are things I use regularly, I’m not looking to spend less)
I just had an idea to get a credit card on my 18th birthday, move all of my subscriptions to the credit card, and pay those off at the end of the month with whatever interest accrues. I think it would be a good idea to manage my subscriptions better (specifically, being able to pay them all at one time rather than having differing amounts taken out of my debit card on different days), and an easy way to start to build credit.
What are the possible cons I’m looking at here? I ran this by my dad and all he said was that it’s “a very bad idea” but he’s also very against having to make any kinds of payments towards anything whatsoever and just declined to elaborate on why it’s such a bad idea.
Credit Card for Subscriptions?
byu/SolanaImaniRowe1 inpersonalfinance
Posted by SolanaImaniRowe1
7 Comments
If you are in the US, most credit cards will completely waive interest on purchases if you pay all credit card bills in full and on time.
It’s a great idea as long as you set up autopay to pay your statement balance in full by the due date and make sure you always have enough money in the checking account to cover the charges.
It’ll be especially good if you are able to get a card you could keep forever like a 2% cash back card.
If that’s all you’re going to use it for then sure. Just make sure you have self control. If you get a say $500 credit limit and you find something you want to buy. It will be really tempting to put it on credit. That might be why your Dad says it’s a bad idea.
Get yourself a Citi Double Cash 2% cash back card. Setup your subscriptions on there. Setup your auto pay in full so you’ll never have to worry about paying interest charges. As long as you have the money in your bank and you don’t over spend on your credit card you be good. You also reap the benefits from using the card correctly.
Some people have an idea of “don’t use credit cards ever”. That’s the right answer for some people, not using credit cards is better than using them irresponsibly. But if you can be responsible and pay it off in full every month, they can be useful for building credit, rewards, purchase protection, etc.
However, you may not be approved for one without any credit history. Look into secured credit cards, or ask older siblings/cousins/aunts/uncles/grandparents who have good credit if they would be willing to co-sign for a very small limit.
Credit cards are great if you pay them off. They’re a disaster if you don’t. The difference really is that simple (and stark).
As long as you pay them off, yes go for it. If you do, there are no cons, as there would be no interest if paid off on time and you would build credit.
Look for a credit card that specifically gives you a high % back on streaming/subscriptions.