At one point in your life, you may start to consider applying for a credit card. Many college students start to receive credit card applications and aren’t exactly sure if they need one. Most people firmly believe that having a credit card is a necessary part of maintaining financial health and stability. Many family members are quick to advise the youngsters to apply for a credit card and start to build their credit history as early as possible. Despite all the helpful situations a credit card can put you in, you should still ask yourself, “Do I need a credit card?” You should carefully think about whether you need a credit card before you sign up.
If credit cards are handled properly and paid off monthly, they can serve as a great asset. If they are handled poorly, credit cards will serve as a liability. If you know yourself and have a really hard time managing your finances, you can most likely get by without a credit card. If you already have a credit card and you are struggling to manage it, you still have the option to close your credit card account or accounts. You can turn to paying off your debt with cash only and that will exclude the interest rate that is charged with credit card payments.
Credit cards are not the only way to build credit. If you pay your bills on time, that automatically builds up your credit. These bills can include rent, utility bills, car payments, etc. If you pay these bills on time for many years, your credit history will be in good shape. If these bills are not paid consistently, it will have a negative impact on your credit history. Many people prefer having a credit card for online shopping purposes, but a debit card can work for that as well.
Overall, if you can’t manage and use a credit card responsibly, you do not have to apply for one. You can still build your credit history via other means. If you decide to apply for a credit card, make sure to pay your monthly payments in full because carrying a balance on a credit card can actually negatively affect your credit score. Think through about your management skills before you accept that tempting offer in the mail.