It’s easy to feel intimidated by credit cards if you know someone who has used one and spent beyond their means. That doesn’t mean you have to do the same. As long as you don’t spend more than you have and pay off the balance each month, you’ll find that the rewards of credit card ownership far outweigh the potential risks.
Not every adult decides they want to get a credit card or several of them when they’re old enough to use them legally. Some have feelings about why they should avoid signing up when card offers come in the mail. For instance, maybe you know someone who got themselves in financial trouble because they used a card to spend beyond their means. Such individuals can sometimes find their way out of this predicament by taking on debt consolidation loans.
However, just because you know someone who carelessly used a credit card doesn’t mean you need to swear off card ownership completely. You can get along in your adult life without a credit card, but there are some noteworthy drawbacks if you try to do so. Let’s talk about four of those now.
As an adult, you’ll likely want to rent a vehicle or check into a hotel eventually. You can do so with cash, but some car rental agencies and hotels frown on that. Even if they allow it, it’s best not to carry large amounts of money with you for risk of theft. Also, credit card limits are generally higher than what you might have in your checking account. If you pay by credit card, you should have more funds available. It’s important not to spend more than you have, but you can use your credit card to float larger purchases or security deposits between pay periods.
Without credit cards, you won’t be able to take advantage of the cashback and rewards that often come with a Mastercard, Visa, or your other card. As long as you’re a responsible card owner and pay off your balance on time, you can enjoy the perks that you’d miss out on if you insist on paying for everything in cash.
If you’re trying to rent a property, such as an apartment or house, your credit cards are a huge part of establishing your credit rating. If you’ve never owned a credit card or used one, a prospective landlord will be less inclined to accept you as a tenant. A track record of paying off your credit card balance each month makes you a more attractive candidate.
If you must pursue a loan for a vehicle, it will be harder if you don’t have the credit score that a couple of credit cards can help you build. The same is true if you’re trying to get a mortgage. When you want to approach a bank about getting your first house, having a couple of credit cards in good standing will be invaluable. Starting your adult life with one or two credit cards and paying off the balance every month is one of the most foolproof ways to build your credit score from the ground up. That number will come in handy when you’re trying to approach a bank or credit union about a car loan, home loan, or business loan, and for other endeavors as well.
It’s easy to feel intimidated by credit cards if you know someone who has used one and spent beyond their means. That doesn’t mean you have to do the same. As long as you don’t spend more than you have and pay off the balance each month, you’ll find that the rewards of credit card ownership far outweigh the potential risks.
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