One of the things that you need to decide on as a married couple is the type of credit cards for newlyweds that you will use. Your choice of credit card should not be taken lightly. This is one of the things that you need to decide on together – as a habit. The habits that you set at the start of your union will be the same ones you will practice for the rest of your life. If you learn to practice good financial habits, that will bode well for your life as a married couple.
Your finances will always be a crucial part of your life together. After all, money is the tool that you will use to finance your lifestyle. It is the very thing that will help you buy each other gifts. It is what you used to fund your recent wedding.
According to the data from The Knot, the average cost to get married in the US is $32,641. This is 60% of the annual budget that a family of 4 needs to live – which is $50,000. If you spent this amount of money, you probably did not pay for everything in cash. You may have used your credit card to pay for some of the expenses – like your honeymoon for instance. The favors, gifts, cake, and other accessories used in your wedding can be charged to your card. If you are one of those who used debt to fund their wedding, then your choice among the credit cards for newlyweds should be done with your nuptial debts in mind.
Two credit cards that are best for newlyweds
According to a study published o NCSU.edu, debt that is brought into a marriage can cause money problems in the life of the couple. In fact, the study revealed that this is the number one problem for newlyweds. So if you are bringing your personal debts into the marriage or you borrowed a lot of money just to get married, you could be in trouble.
Fortunately, you do not have to give up debt entirely to solve your problems. There are credit cards for newlyweds that you can apply to use jointly. As long as you make a commitment to use it wisely, these cards can help you get a good credit score as a couple. When you have a good score, future loans like mortgages or auto loans can be borrowed with a low-interest rate.
So what are the two credit cards that you can use?
Balance transfer. The first is a balance transfer card. This is a card that you can use to consolidate your other credit card debts. According to an article published on Market Watch, 36% of couples admitted to using their credit cards to pay for wedding-related costs. A balance transfer card is usually something that is offered with a 0% interest during the first few months that you are using the card. This is a great opportunity for you to get rid of high-interest debts of your existing credit cards. You can transfer it to the balance transfer card and make aggressive payments for a couple months. Since you are not charged with interest during a first few months, all your aggressive payments will be paid towards your principal balance. You can get rid of your debts easily. Just make sure that you can pay off a significant amount on your balance because if not, you will encounter the high-interest of the balance transfer card.
Rewards card. The second of the credit cards for newlyweds that you can look into are rewards cards. These are cards that give you perks as you use it. For instance, one card can give you cash-back rewards for every amount that you spend. Like if you spent $100, you get $1 back. There are also credit card rewards that will give you travel miles for every purchase. This is a great card to use if you and your spouse love to travel. If you were smart about your credit card use while spending on your wedding, you could have accumulated travel miles on your card. It could have been enough to pay for your honeymoon. Just make sure that you will not fall into the credit card rewards trap. You have to understand how to maximize your rewards and that you will really use it. Otherwise, it will all be wasted.
These two cards are great options for you and your spouse to use as you use it on household expenses. Do your research, compared credit card perks and conduct due diligence to ensure that these credit cards for newlyweds will not destroy your finances – and in effect, your marriage.
Tips to establish financial harmony in your marriage
Regardless if your marriage started in debt or one of you brought in debt from a past financial decision, you need to make a commitment to work on it together. This is how you build financial harmony in your marriage.
In another study published on NCSU.edu, it is revealed that financial harmony plays an important role in relationships. According to their data, the primary cause of conflict between couples is their finances. Communication came in second. If you have financial harmony, both finances and communication will be taken cared of. In fact, it is revealed in the same study that communication helped save relationships. Kindness, time together, and respect followed it as the most important skills to have in a relationship.
Of course, establishing financial harmony is easier said than done. Here are some tips that you can use to practice having harmony when you deal with your household finances.
Know your financial strengths. Start by getting to know who is the saver and the spender. In most cases, you have one saver and one spender in the relationship. But even if both of you are saver or spenders, you are bound to have different opinions about your finances. That affects the way you manage your finances. If you have different financial management styles, you most certainly have different strengths and weaknesses. Make sure you talk it out with each other to know what these are. This is how you develop a sense of respect for your differences.
Identify your financial responsibilities. Once you know your financial strengths, it is time for you to delegate financial responsibilities. Who will pay for what bill? Who will file all the important documents? Who will monitor the money that is coming in and out of the house? Some couples will assign only one person to do this – but it is still important for the other spouse to pitch in. Make sure the two of you will decide on your finances together.
Set financial goals together. Since you are newlyweds, this should be a fun idea. You are starting a new chapter in your life. That means looking forward into the future is quite exciting. Imagine the life that you want to have together and set goals to help yourselves reach that. It is a great time for the two of you to plan your future. Having these goals can help you make aligned financial decisions.
Analyze your financial position together. It is important for a couple to revisit their budget and financial goals every now and then. Sometimes, the changes and growth you go through as a couple will alter your priorities and goals for the future. Do not miss these changes. You need to make the revisions as they happen so you will not waste time saving up for something that you no longer need for your future.
Plan your debt payment strategy. If you have any debts, it is not a good idea to leave each other to take care of their personal debts. Try working it out together. Going through a tough time as a couple and solving your debt problems together is a great way to practice financial harmony. The sacrifices and financial pains you will go through can strengthen your love and tolerance for each other.
Define the financial rules. Finally, you need to define the financial rules in the marriage. If you have decided to maintain separate accounts or keep some personal money to yourself, you need to set rules on how that should be spent. This will help you avoid financial infidelity – which can be a troublesome issue in a marriage.
As newlyweds, the road ahead is long and not always smooth. But if you have an open communication and mutual respect for each other, this will help you stay together for a very long time.
Common questions about credit cards
Question: Are credit cards a good idea?
Answer: It actually depends on how you plan to use it. This purchasing tool can be a great way to build your credit score. However, it can also destroy your finances. Make sure you learn how to use it properly so you will not encounter problems in the future.
Question: How do you use credit cards smartly?
Answer: You need to use it only when it is necessary. Also, you have to be mindful of the rewards program of your card. Make sure you use it in such a way that is still necessary, but will help you earn as many rewards as you can. And most importantly, you have to learn how to make on-time payments. Ideally, you want to pay your balance in full at the end of each month. That is how you can avoid the finance charges that are calculated based on the high-interest rate of your card.
Question: How do credit cards build credit?
Answer: If you use it properly, this card can help you create a credit history that shows a responsible credit borrower. At least, this is true if you pay your dues on time or make smart credit decisions. When you are deemed to be a low-risk borrower, the creditor or lender will not feel the need to impose a high-interest on your debt.
Question: Where can credit cards be used?
Answer: This card can be used anywhere. This is why the control will only come from your end. You need to decide where you will use it. Will you only use it to pay for the groceries? Or will you use it on all your purchases? That is really up to you and the financial strategy that you will use in your household.
Question: What credit card should I use?
Answer: This depends on the lifestyle that you want to have. If you frequent a particular store (e.g. supermarket or grocery), you can get a store credit card to avail of discounts from that merchant. If you love to travel, getting a card that offers travel miles is a great choice.
