Don’t be scared of Credit Cards!
Many college students may be scared to have a credit card because of the horrifying stories of individuals up to their nose in credit card debt, but they do not have to be scary at all! Credit cards, when paid off in full and on time every month, have many benefits including building credit, earning cash back, and discounts when online shopping.
First, building credit is extremely important for young adults. Your credit score determines if you can get a loan for a large purchase such as a house or car, if you can rent an apartment or house, and various other financial activities. An important aspect of building your credit score, which ranges from 300-850, is the amount of time you have your credit card, so I recommend young adults start early with a card for students or pay for your food or gas only to build up credit.
Second, credit cards allow you to earn money! They are literally paying you for using a credit card. The amount of cash back depends on the card, but nonetheless, you can earn extra cash that you would not earn just using cash or a debit card.
Lastly, many credit cards offer discounts when you shop online using their credit card. Again, they are paying you to shop and who doesn’t love that?! For example, if you use a Discover card, they have ‘Discover Deals’ which typically give you a 5-15% discount (in the form of cash back).
Credit cards have many benefits as discussed above, but it is almost important to make sure to spend what you can afford and pay your bills on time or ahead of time because the moment you miss a payment, debt will accrue immediately.
To sum it up, credit cards can be your friend as long as you don’t misuse them!