It’s Time For You To Get A Credit Card

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Credit cards get a bad rap, and to be honest, it’s for no good reason. Maybe it stems from the dozens of letters in the mail you get advertising a fancy new card or a horror story you were told about someone going into thousands of dollars of credit card debt. While the first one is easy to fix (opt-out here), the second will require some discipline and potentially require forming new habits.

The bottom line is you need to have a credit card. If you are planning to make a large purchase, like a car or home, then you will most likely finance it. To finance, you need to have credit history and just using a debit card isn’t going to cut it. Of course, there are other ways to build credit, but why would you take out a small loan when you don’t need to? You could simply use a credit card to purchase items that you will be buying anyway.

The largest argument I see against credit cards is that they are a scam for big banks to get rich off of. This simply isn’t true. Are they profitable? Of course, but only because people don’t pay them off. I go more in-depth on how banks make money on credit cards in my book which you can find here.

According to Creditcard.com, 67% of Americans between the ages of 18-24 have credit cards. The fed then went on to add that these people on average have $5,422 in credit card debt. There is a simple solution to this, however: pay off your credit cards in full every month. Don’t just make the minimum payment and absolutely NEVER miss a payment. I believe that following that one rule would change a majority of people’s financial situations. It is that large of a problem, with that simple of a solution. If you believe you have the self-discipline necessary to pay it off each month, then get a card and enjoy these benefits.

Credit Card Benefits

1. Build your credit – I talked about this earlier but credit cards really are the simplest way to build your credit. As we’ll talk about later, your credit score is vital to get approved for a mortgage and getting that interest rate down.
2. Rewards – What if I told you that you could take a vacation and pay for it all from rewards points that you earned from using your credit card? It’s possible and easier than you think.
3. Easier to track your spending –  If you’re like me and track all your spending online, using a credit card puts all your information in one place that can be easily exported. This means you don’t have to track expenses on pen and paper when you’re compiling your budget (which you should be doing).
4. Safer than cash – Have you ever lost cash? Me too. If you ever lose your credit card, all you have to do is call a helpline where they’ll cancel the old one and send you a new one.
5. Added card benefits – Some cards have benefits that extend beyond reward points. For instance, one of mine allows me to get TSA precheck for free as well as access to airport lounges worldwide.
6. An emergency line of money – I’m hesitant to add this to the list but credit cards can be used in emergencies. No matter what. you should go to your emergency fund first but if an expense comes up that you just can’t afford, you can use a credit card. It is important to remember that whatever you borrow you must pay back!

Do you think you are ready to take the step and sign up for a card?

Down the road I’ll be sharing my picks for top cards based on different categories but if you have questions now then drop me a quick message on the Contact Us page.

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