Your 21-year old cousin is graduating from college and has already accepted her first full-time job offer. She will be earning $3,000 per month. She already has an apartment and her fixed monthly expenses are $1500 per month. She enjoys traveling, but doesn't have a lot of money to do so. She also has $500 per month in student loan payments.

She needs a car to get to work, but knows that she has to finance it through an auto loan. She also wants to begin building her credit history by applying for a credit card; she has been an authorized user on her parents' credit card since high school.

She calls and asks for your advice on both an auto loan and a credit card. Based on what your cousin wants to accomplish financially and her current financial obligations, would you advise her to apply for both types of credit? Why or why not?

Complete responses should consider:

--At least 3 specific pieces of advice related to each type of credit: credit cards and auto loans.

--The advice should consider whether the type of credit is appropriate for a young adult like her.

--What trade-offs will your cousin have to make based on the advice you are giving her?