Is it mandatory to have a credit card? If yes, what’s the benefit of having one?
An internet user asked, “Do I actually NEED a credit card, or could I just survive off a debit card?”.
The Original Poster (OP) adds, “The reason I’m asking is that I don’t know much about credit cards except the only thing I do know is you got to pay the money back to the bank, and if you don’t you’ll be in debt, which obviously no one wants.
My mom is 46, and I’m almost certain she doesn’t have a credit card, and she’s doing fine, so do I need one when I turn 18, or is it fine never getting one? I’m 17 if that matters.”
Below, we’ve curated the top responses.
Treat The CC Like Cash
“The key is to treat the CC like cash and set it to be automatically paid in full EVERY month! A lot of perks to using a CC – security against fraud, acceptance while traveling, travel and cash rewards, and a way to build your credit.”
You Don’t Exactly *Need* It
“You don’t *need* one, it’s just harder without one to build up your credit score. What’s more important than a credit card though is keeping an active debit card with the same bank instead of getting a new one down the road.”
Not Necessary In Europe
“I can’t speak for Americans but here in Europe they are not popular at all. I have never had the need for one.”
There Is No Downside To It
“OP, there is no downside to getting a credit card unless you’re irresponsible with money. If you have a credit card and use it a little bit, you will build a good credit score, which will make it easier to get loans/mortgages at lower interest rates.
Plus, it’s better to have a line of credit in an emergency than not have one.”
Debit Cards Are Dangerous
“Debit cards are dangerous. If your data gets compromised, they can clean you out. Credit cards offer a lot more protection in that regard.
There are no-fee credit cards that can give you ~1% back in cash or points on all purchases.”
Can Be Great If You’re Being Responsible
“They aren’t necessary but can be a very good thing if you’re responsible.
You’re fine without one in theory but it can help a lot to build your credit rating. I had to get my mom to co-sign my first car because I didn’t have any credit.
Now I only use my credit card for purchases/bills, pay it off immediately, and have a higher credit score than most people I know.”
The Main Benefit Is That You Build Credit
“Great job on realizing you have to pay it off each month – lots of people don’t realize how much the interest stacks up.
The main benefit of a credit card is that you build credit. Later when you want to buy a car or house (which usually requires a loan, but this is ‘good debt’), the lender will pull up your credit report and see ‘Oh they’ve borrowed and paid back $X over the last Y years on the credit card, I can trust them more to pay back this car loan’.”
Credit Card Does A Few More Things
“There are a few things that a credit card does that a debit card can’t, other than building credit.
Renting a car – a great many car rental businesses *will not* rent you a car on a debit card, no matter how much you are willing to pay.
Checking into a hotel – you *can* do it, but they will put a $500 hold on the card before they give you your room key. This is not to cover the cost of the room, it is in addition to the cost of the room, and the hold only goes away after you check out.”
Nothing Better Than Using A Credit Card Responsibly
“The short answer in my mind is yes. A credit card and its RESPONSIBLE use should be part of your financial portfolio.
For one, you want to build your credit up, so that you will be able to buy things like a house or a car.
You also want to have a credit card for short-term emergencies, for example, someone steals your suitcase while you are on vacation and you need to buy things.
That said, responsible use is important. You should not use a credit card to have things you cannot actually afford.”
That’s The Easiest Way To Get Credit
“Getting a credit card is the easiest way to get credit. Having no credit could eventually hold you back. My mom never had a credit card or took a loan so she has no credit.
She ended up getting turned down for apartments because she had no credit. That’s what finally prompted her to get a credit card.
With all that said. You don’t need to get one *at* 18.”
It’s Great To Build Up Your Credit History
“It’s better to get a credit card so that you can build up your credit history, after all, you can plan on living till you’re 80. You don’t have to go into debt to prove that you can pay on time.
Get a credit card and put one small recurring payment on it–gym membership? auto insurance? education-related?–and pay that off every month.
That way, you’re not in the habit of using the credit card on impulse or non-essential purchases; you’re using it to pay for something that you already budgeted for. You can even set up the credit card to be paid automatically from your bank account.”
Credit Cards Give You Better Protection
“You are protected better with a credit card as well. If your debit card gets compromised a thief can drain your bank account and you could find yourself without access to your funds for the duration of the bank’s investigation.
If they get your credit card, then you still have access to your money while they investigate.”
A Good Tool When Used Correctly
“They aren’t strictly necessary now but, if used correctly, they’re a good tool.
Credit cards will help you build your credit. Which is essentially a score on how likely you are to pay a debt back.
If you ever want financing for a big purchase like a house, they will look at your credit score. If it’s low they won’t finance it and you’ll be stuck renting.
You’ll be limited to what’s in your bank account.”
Using Credit Cards While Traveling Is A Good Idea
“I think people have covered how credit cards are good to have to build credit, so I’ll add another reason to have one.
If you ever stay in a hotel, they’ll place a hold on your card for more than the amount of the room, in case of damages or other charges. On a debit card, that means you won’t have access to all of your money, and could even lead to overdraft fees. If you can, *always use a credit card at hotels*.
There are other things that place holds too, like some gas stations, but most are in the few dollars range and probably not a big deal. With hotels, it can be hundreds of dollars.
Credit cards are also more secure and more likely to refund any fraudulent transactions, so it’s a good idea to use them when traveling in general. Just make sure not to use it as an excuse to overspend, and to pay it off afterwards.”
You Don’t Need One Unless You’re Extremely Disciplined
“No, you don’t need one. Most people should not have one, because the vast majority do not pay off every month. You need to be extremely disciplined to use one responsibly.”
It’s Nice To Have For Emergencies
“I use a credit card for all my purchases as it gets me 3-5% off of all purchases. I do however pay it off at the end of each month. If you do not trust yourself, start with a credit card with a low limit.
Would I say you NEED a credit card though? No, not at all. It’s nice to have for emergencies and as I mentioned before, the cashback is nice.”
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