🙅 Credit Card Chaos: 10 mistakes to Avoid in Your 20s

Hey Wicked Club fam!

Welcome back! This month, I'm taking my time to get real about my finances. Canceled two unused subscriptions, reviewed my credit score (looking good!), and started tracking expenses. Feeling proud seeing how my spending habits are changing – more mindful, less impulse buys! I hope you’re doing the same and you’re taking steps towards your financial wellness.

🗒️ This week’s rundown:

• Topic of the week: Credit Card Chaos: 10 Mistakes to Avoid in Your 20s

• Understanding Rewards Program: Bilt Mastercard Rewards

• What’s On My Feed?

🚫 Credit Card Mistakes to Avoid in Your 20s

Let's ditch the sugarcoating! While I love sharing ways to leverage credit cards, there are some absolute no-go zones. Especially for folks in their early twenties, I hear stories that make me scream "Don't do it!" So, buckle up, because we're about to dive into the credit card mistakes you absolutely want to avoid.

1. Minimum Payment Trap:

• Mistake: Only paying the minimum amount due each month.

• Why it's bad: Minimum payments barely cover the interest accrued, leaving you stuck in a cycle of debt.

• Solution: Pay your statement balance in full each month to avoid interest charges.

Always pay your balances in full!

2. Maxing Out Your Cards:

• Mistake: Using your entire credit limit or exceeding it.

• Why it's bad: High credit utilization (total credit used divided by credit limit) negatively impacts your credit score.

• Solution: Maintain a low credit utilization ratio (ideally below 30%).

Your credit limit is not your spending power!

3. Missing Payments:

• Mistake: Skipping or making late credit card payments.

• Why it's bad: Late payments can significantly damage your credit score and incur hefty fees.

• Solution: Set up automatic payments or reminders to ensure timely payments.

Set up auto-pay or reminders for timely payments for all your credit cards!

4. Not Understanding Interest Rates:

• Mistake: Not being aware of your credit card's interest rate or how it works.

• Why it's bad: High-interest rates can quickly snowball debt if not managed properly.

• Solution: Choose a card with a low-interest rate and understand how interest accrues on your balance. If you’re paying high-interest rates on credit card debt, consider negotiating your interest rates with your credit card company or even balance transferring to a 0% APR card. Learn more about managing credit card debt here.

Always choose credit cards with low-interest rates and consider negotiating your rates with your creditor when necessary!

5. Impulse Purchases:

• Mistake: Using your credit card for impulse buys or unnecessary expenses.

• Why it's bad: Unnecessary spending can easily spiral into debt, especially with high-interest rates.

• Solution: Create a budget and stick to it. Consider using a debit card or cash for everyday purchases to avoid impulsive swiping.

Don’t use your credit card like it’s free money. You have to pay everything back!

6. Not Taking Advantage of Rewards:

• Mistake: Not using your card's rewards program effectively.

• Why it's bad: You're missing out on potential benefits like cashback, travel points, or other perks.

• Solution: Understand your card's reward program and maximize your points by using the card for eligible purchases. Wicked Pay app is exactly what you need for this. 😉 

You’re basically leaving free money and benefits behind by ignoring your card’s reward programs!

7. Closing Accounts Too Early:

• Mistake: Closing credit card accounts you no longer use, especially older ones with good credit history.

• Why it's bad: Closing accounts can shorten your average credit age (a factor in credit score) and decrease your total available credit, potentially raising your credit utilization ratio.

• Solution: Keeping older credit cards with a good payment history open, even if unused, can benefit your score. These accounts contribute to a longer credit history and a better credit utilization ratio (total debt vs. available credit). If closure is necessary, prioritize recently opened accounts and aim to close them after a long history of on-time payments.

  Downgrade First (Optional): If you're considering canceling a card with an annual fee, explore downgrading options offered by the issuer. Downgrading to a no-fee version of the card allows you to keep the account open and its positive credit history, while avoiding the annual charge.

  Quick tip: For cards I don't use often but want to keep open, I set auto-pay for a small monthly expense like my Spotify subscription. This ensures a small, regular transaction that keeps the account active and in good standing. You can find similar small, recurring payments that work for you to achieve the same benefit.

Only close your accounts if you REALLY need to. And when you do decide to close the account, have a plan!

8. Applying for Too Many Cards:

• Mistake: Submitting a high volume of credit card applications in a short period.

• Why it's bad: Multiple inquiries can negatively impact your credit score, especially if you're denied credit.

• Solution: Be strategic about applying for new cards. Space out applications and only apply for cards you truly need or that offer significant benefits that align with your spending habits.

It’s a big 🚩 when you apply for too many cards in a short period of time. Just don’t do it.

9. Taking Out Cash Advances (Unless Absolutely Necessary):

• Mistake: Reliance on cash advances for everyday spending.

• Why it's bad: Cash advances typically come with the highest interest rates and fees associated with your credit card. Additionally, there's often no grace period, meaning interest starts accruing immediately. This can quickly snowball into significant debt.

• Solution: Explore alternative solutions for emergencies or unexpected expenses. Consider building an emergency fund, utilizing a low-interest personal loan, or looking for ways to cut back on spending.

Cash Advances can get you in serious debt, I’d stay away from this!

10. Using Credit Card for Large Recurring Bills (Generally Not Recommended):

• Why it's not recommended: Large recurring bills like rent (unless it’s a card like Bilt Mastercard) or mortgage payments often involve high amounts. Paying them with a credit card can lead to significant interest charges if not paid in full immediately. Additionally, not all landlords or mortgage lenders accept credit card payments, and those that do may charge processing fees that negate any potential rewards.

• Alternatives: Prioritize using debit cards, bank transfers, or electronic payments directly from your checking account for rent and mortgage payments. This avoids interest charges and keeps your budget on track.

Credit cards are not suitable for all types of payments or purchases. Period.

💳️ Understanding Rewards Program - Bilt Rewards

As a renter, I (and probably most of us!) always dreamed of earning rewards on that one big monthly expense – rent. Well, the dream is finally a reality! The Bilt Mastercard® offers a unique rewards program designed specifically for renters, letting you rack up points on your rent payments alongside everyday purchases.

Bilt has quickly become one of my favorite cards. Not only does it reward you for something you already pay for (rent!), but it comes loaded with all sorts of cool benefits and rewards. Let's dive deeper into the details of the Bilt Credit Card and its program to see if it's the right fit for you.

🏆 What Are Bilt Rewards?

Bilt Rewards is a loyalty program designed to reward members for various activities. Here’s how it works:

1. Earning Points:

   • Rent Payments: Bilt Rewards allows you to earn points on your monthly rent payments.

   • Eligible Purchases: Beyond rent, you can earn points on other eligible purchases.

   • Bilt World Elite Mastercard®: If you choose to apply for the Bilt Mastercard, you’ll unlock additional earning potential.

2. Redemption Options:

   • Once you start earning Bilt Rewards, you have several redemption options:

     • Transfer Partners: Transfer points to travel partners.

     • Merchandise: Use points for merchandise.

     • Rent Reduction: Apply points toward your rent payment.

     • Homeownership: Save points for a down payment on a home.

     • Fitness Classes: Redeem points for fitness classes.

🤝 Bilt Rewards Alliance

• The heart of Bilt Rewards lies in the Bilt Rewards Alliance.

• Eligible Properties: If you live in a property within the Bilt Rewards Alliance, you can earn Bilt Rewards on your monthly rent.

• Non-Cardholders: Even if you don’t have the Bilt Mastercard, you can still earn up to 250 Bilt Rewards each month.

• Cardholders: With the Bilt World Elite Mastercard, you can earn up to 100,000 Bilt Rewards annually.

• Transaction Requirement: To earn rewards, cardholders must use the Bilt Mastercard for at least five transactions per statement period.

• Landlord Participation: If your landlord isn’t part of the Bilt network, encourage them to join. They can request inclusion by emailing [email protected].

📈 Earning Status

• Bilt Rewards introduces its own elite status tiers:

  • Blue: Less than 50,000 qualifying points (or less than $10,000 annual cumulative spend).

  • Silver: Between 50,000 and 124,999 qualifying points (or between $10,000 and $24,999 annual cumulative spend).

  • Gold: Between 125,000 and 199,999 qualifying points (or between $25,000 and $49,999 annual cumulative spend).

  • Platinum: 200,000 or more qualifying points (or $50,000 or more annual cumulative spend).

• Similar to airline and hotel loyalty programs, these tiers offer benefits based on your loyalty.

🚁 Bilt’s Partnership with BLADE

• Another noteworthy travel perk of being a Bilt Rewards member (whether you hold the credit card or not) is access to benefits with BLADE, the commuter helicopter service.

• Flight Routes: BLADE offers flights between Manhattan and the New York City area airports, as well as service to the Hamptons, Montauk, and select international destinations.

• Earning Points: Bilt Rewards members who pay for BLADE rides with a Bilt-connected card will earn 2x points.

• Discounts on Flights:

  • Bilt Silver: 10% off BLADE airport flights booked in the Bilt app or website.

  • Bilt Gold: 10% off BLADE airport flights plus access to BLADE lounges even when not flying.

  • Bilt Platinum: All the above benefits plus one free BLADE flight between Newark, New York-JFK, and Manhattan or Monaco and Nice.

💳 Bilt World Elite Mastercard® Features

• Rent Rewards: Earn 1 point per dollar on rent payments without any transaction fees (up to 100,000 points annually).

• Dining Delights: Enjoy 3 points per dollar on dining—whether you’re dining out or ordering in.

• Travel Bonuses: Get 2 points per dollar on travel (when booked directly with airlines, hotels, car rentals, or cruise companies).

• Other Purchases: Earn 1 point per dollar on other purchases.

• Cell Phone Insurance: Protect your cell phone with this benefit.

• Purchase Security: Coverage against theft and damage.

• Mastercard® World Elite Concierge: Access personalized assistance.

• Bilt X Lyft Partnership: Earn Up to 5X Points on Lyft Rides with Bilt Rewards by linking your Bilt Rewards account with the Lyft app.

• No Foreign Currency Conversion Fee: Travel without extra fees.

Conclusion

The Bilt Rewards Credit Card offers a fresh perspective on rewards, especially for renters. Whether you’re saving for a home or simply want to maximize your points, consider the Bilt Mastercard as your go-to card for rent and beyond.

📱 What’s On My Feed?

I recently got to know about a YouTuber named Caleb Hammer. His content is a great mix of informative and entertaining. He tackles serious topics in a way that's both eye-opening and funny. I highly recommend checking him out!

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