Are You Hurting Yourself By Not Using Credit Cards?

Blog Post created by amandaabella Employee on May 30, 2017

I was recently speaking at a conference in Austin about why millennials shy away from credit cards. In case you didn’t know, data shows that more than 6 in 10 millennials don’t use a credit card.


I am not one of them. In fact, I’m personally “team credit card” all the way. But before getting into why, let me explain why millennials avoid using plastic.


Millennials Are Afraid—And With Good Reason


Based on conversations I’ve had with my blog readers, as well as many of the conversations I had at this conference, millennials shy away from credit cards because they are scared of getting into financial trouble.


First, they feel like they have enough debt to worry about in the form of student loans. Second, they often saw their parents or older siblings get into trouble with debt. And, third, there are still a lot of misconceptions out there about how to properly use a credit card.


The good news is millennials can overcome all of this with education. Now, here’s why you may want to consider using a credit card.


It Helps You Build Credit


I have an excellent credit score—and all of it is thanks to using credit cards responsibly. Read: I pay off my balance in full each month.


Why is it so important to build credit? Because it can save you thousands of dollars in the long run. If you have a good credit score, you’ll shell out less money in interest if you ever find yourself needing to borrow money (like when you get a mortgage).


You Can Get Some Sweet Perks


I’ve gotten over 15 free flights thanks to credit cards. The good news for the consumer is there is major rewards war going on now among credit card issuers. Based on the conference I just attended, they are literally fighting trying to come up with the best rewards they can to get people to use their credit cards.


If you use these cards responsibly, you could see cash back, free flights, and hotel stays. You can even find a credit card that invests your cash back into an investment account. Other perks include extended warranties, automatic car rental insurance, and even concierge services.


The truth is debit cards don’t offer these kinds of perks (at least not yet), so take advantage by getting a good credit card and learning how to use it.


They Are—In Some Ways—Safer Than A Debit Card


When I had my wallet stolen a few years ago, I noticed how it was so much easier to resolve the issue with my credit cards versus my debit card.


If someone steals your credit card, all you have to do is call the issuer, cancel the card, and get a new one. The fraudulent charges are also reversed pretty quickly.


It’s a little more complicated with a debit card because they can literally drain your money right out of your account, and it could take a while to get it back. Trust me, I learned this the hard way.


Do you use credit cards or do you shy away from them? Why or why not? Sign up or log in with your Salt account to let us know in the comments below.