How To Use A Credit Card & How To Deal With Rich Friends

In this week of Ask Chelsea Anything, I’ll be tackling two questions that are equally difficult to navigate for a just-figuring-it-out post grad, and equally important: how to successfully use a credit card, and how to deal with friend/money envy. So let’s get to it, and don’t forget, if you have a question for me, send it to askchelseaanything@thefinancialdiet.com.

I might have a good answer for you, and if nothing else, my robust career in being a hot mess might just provide a cautionary tale!

Hi Chelsea,

What should I use and limit my credit card use to, in order to not get carried away but also improve my credit rating?

Cheers,

Brady

So this is a great question, because it’s one in which a very personal and specific experience in Chelsea’s Hot Mess Career can be of use to you. As someone who ruined her credit by abusing a credit card, I have a specific strategy that works for me, and hasn’t failed yet. (And I know that the comment brigade who is smarter and more financially savvy than me — and whom I love! — will have their own strategies to elaborate on here, but this is mine and I can vouch 100% for its efficacy.)

If you want to resist as much temptation as humanly possible, but use your credit card to your advantage, set up as many bills as you can to be charged on your card, and then auto-set your checking account to immediately pay off the card, in full, every month. This means that you are essentially getting the good credit for free — as well as any points, miles, or cash back that might come with it — and not risking any kind of marks against your score, because you have automatically set your account to pay off the right amount. Of course, this means that you do not carry your card around with you (to avoid temptation), nor do you use it for any kind of online shopping. Some people can deal with that use responsibly, but if you are not one of them, “setting it and forgetting it” is the best strategy to get the best out of your card without putting yourself at risk.

Once your card is safely tucked away in your underwear drawer, and you don’t have to worry about manually doing anything (other than checking the account every so often to make sure it’s all going well), you’ll be surprised how much you don’t need those random little purchases your credit card makes all too easy.

Chelsea,

I am a struggling post-grad dealing with entry-level wages (at a job I love, but still!), student debt, and three roommates who make it basically impossible to do anything with my new boyfriend (yikes!). Most of my friends are in the same boat as me, so we commiserate and relate, but my best friend from college, who works and lives in the same city as me, is extremely wealthy through her parents. She has a fabulous apartment to herself, never has to worry about how she’ll pay for this or that, and is constantly Instagramming from restaurants I can’t afford. To her credit, she never puts pressure on me to follow her in this, but basically I hate her. I cannot help resenting her, and I know it’s wrong, but I do. As a friend, I love her. As someone in my life, she feels bad for my mental health. What do I do?

-A Bitter Lemon In The City

Ahh, this question. I think most of us have been there to some degree, and it sucks. Honestly? There’s no easy answer here, but the first step you have to take is to be honest: with yourself, and with her. You seem lucid about the situation, and your semi-irrational reasons for feeling the way you do about her life, but you are also making a lot of assumptions about her “never having to worry.” At the very least, we never know what kind of strings come attached with parental money, and some of it is a lot less pleasant than we’d like to imagine. I’m not saying you’re wrong about her life, but I’m saying a lot of what you’re experiencing is based on your own assumptions and filling in the blanks. The more you can stick to the facts as you can confirm them, the better.

But again, honesty is key. You have to say to her, friend to friend and adult to adult, “We are in very different places, financially, and it can feel tough for me to watch you live the way you do, knowing how much I’m struggling. It’s my own issue, and I’m not blaming you, but if I have to take certain steps to preserve my mental health, I don’t want you to take them personally.” This might mean things like unfollowing her on Instagram, or banning talk about certain subjects (things she bought, etc), or even seeing her in money-neutral zones, such as at one another’s houses, so that you don’t feel pressured to “keep up.”

In the end, though, it feels unfair to both of you to totally lose a friend over this. If you love her as a person, you can’t fault her for winning the financial genetic lottery — the truth is, you’d probably be living the exact same lifestyle as she is, if you were in her place. I’d do my best to follow the steps I laid out above, and then try your active best to forget about it. Remember that, yes, she is richer than you. Her life is materially easier. There’s nothing you can do about it, and owning it mentally is the only way to regain control of the situation, and of your emotions.

The more you confront these feelings head-on, instead of letting them fester and bother you, the more you can move on from them. Acknowledging your differences, with her and with yourself, instead of letting them be the elephant in the room, is actually the adult thing to do here. We pretend that money is this ugly thing we should avoid talking about, but in reality, ignoring our privileges or disadvantages, and the real impact they have on our everyday lives, is the truly ugly (and unfair) thing to do, because it only benefits the person who is doing better, and furthers their privilege. Real friends own their shit, and you should, too.