Most folks will tell you “Yes. You do need a credit card.” According to Experian, the average consumer in 2017 owned 3.1 credit cards. Although the general consensus is to own at least one credit card, this isn’t necessarily true for everyone.
Perks of owning a credit card
People tend to look at credit cards as a convenient tool that helps build credit while organizing their finances. Putting multiple expenses onto a single credit card results in a single credit card bill. For many this helps them organize their finances.
Building a solid credit history is another great reason to own a credit card. Being able to prove that you can make consistent credit card payments will help when applying for loans when needed. This makes credit cards very appealing to young adults who are just starting their financial careers.
Many credit card companies offer some type of rewards program for credit card users. Generally, the companies offer incentives to charge more to the credit card in exchange for perks. The 3 most common types of rewards are cash, miles, and points.
Most credit card companies are very forgiving when it comes to fraudulent transactions. Federal law states that a person can only be accountable for up to $50 of unauthorized credit card activity, but many companies will even offer their customers zero liability for unauthorized activity on their account.
Downfalls of owning a credit card
Not everyone is stable enough o own a credit card though. The key is to use them responsibly, making sure you make all payments on time.
People who struggle to pay off debt, or control their spending habits tend to charge too much to their credit cards. Similar to the way credit cards can greatly improve your credit score, they can also greatly hinder one’s score.
It’s important to not charge more than you will be able to pay back.
Building a Credit History without a Credit Card
Building credit without a credit card can be difficult, but it is possible. Paying monthly payments on student loans is great way for young adults to start building credit, as these payments will be reported to the credit bureaus.
In rare cases, rental payments may be reported to credit bureaus, making your monthly rent payments a fantastic way to build up your credit history. Car loans are another great way to build credit if you happen to need one.
Credit cards can be a great asset to your finances, but only if they are used responsibly.
Source: https://creditcards.usnews.com/articles/do-i-really-need-a-credit-card
