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Credit 101: Why Get a Credit Card? Are Credit Cards Good?

The thought of going into debt can be terrifying. You’ve heard horror stories of people claiming bankruptcy, their homes going into foreclosure, and lives that lead to devastating financial ruin. As a result, some people avoid debt and credit cards like the plague.

But credit cards can be a good thing. If you’re responsible with your finances, creating positive debt can have more pros than cons.

Below are several reasons to consider getting a credit card. Why get a credit card? Read on to find the answer.

Credit History

If you’re ever going to make a big purchase like a car or a home, then you need to have a history of good credit to get a loan.

Chances are you’re not going to pay cash for your house. Lenders will be hesitant to lend you a large sum of money if you’ve never demonstrated an ability to pay anything back.

Good credit history is important for showing lenders that you’re responsible. They’re not looking for large amounts of money borrow. Instead, they want to see that you’ve paid back debt on a regular basis and timely manner.

Why get a credit card? Even if you only purchase small items on your credit card, you built history. If you pay your balance off each month, you’ll be on your way to establishing a good credit history.

Car Rentals and Hotels

If you plan on traveling, you’re going to have a hard time renting a car or staying in a hotel without a credit card. Instead, you’ll be required to come up with a hefty deposit.

In addition, renting a car with a credit card adds extra protection. Most credit cards come with built-in liability insurance, in case you get into an accident with a rental.

Fraud and Identity Theft Protection

If your wallet is ever lost or stolen, consider the cash gone.

If you have a debit card, you’ll have to notify your financial institution to investigate the claim. You may or may not get your money back if you don’t put a hold on your debit card in time. While the dispute is being settled, you’re out whatever money they stole, which could be everything you had in your account.

With a credit card, you’re protected. If someone steals your card information, most credit cards will reimburse you for an unauthorized charge. But you aren’t responsible for the stolen charges in the meantime.

Why get a credit card? For your protection.

Perks

Many credit cards come with some awesome perks, including cash back and travel points. If you’re responsible about paying off your credit debt every month and don’t get in over your head, this can be a great way to get free stays at a hotel, airline tickets, and money.

With sign up bonuses, you can take advance of these rewards within a couple months.

Some credit cards even offer discounts at stores and restaurants and other incentives. Just remember to be responsible and don’t borrow more than you can afford.

Why get a credit card? Free travel and money!

Employment

Believe or not, some employers check your credit history. They want to make sure you’re responsible with money, especially if it’s a job where you’ll be handling money.

If you don’t have a credit history, employers might be reluctant to hire you. You wouldn’t want to lose out on a great job just because you think you’re doing the right thing by not having a credit card. In this case, the right thing might turn out to be the wrong thing.

Why get a credit card? If you’re looking for a new job, you need one.

Emergencies

The unexpected will happen. In an emergency, you might be able to rely on friends or family, but not always. Even if you never use your credit card, having one in case of an emergency is an important and responsible thing to do.

Why get a credit card? Life happens.

Why Get a Credit Card?

It’s the responsible, adult thing to do. There are just going to be times when a debit card just isn’t enough. You might need extra money in an emergency, you might need to demonstrate a credit history, and you may need protection. Plus free travel and money!

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