For a long period of my life, I was of the opinion that a credit card wasn’t really necessary. Living my life without a single credit card worked for a while but then I caved in to the pressure (everyone was telling me how much I needed one) and have continued using them until this day.
I got along fine without a credit card of my own. Sure, I was young back then and had fewer responsibilities, but that’s beside the point. I really do think that I could have kept myself credit card free up to the current day and beyond if I had some support.
Instead of just shoving an opinion in your face (because having a credit card really is a personal choice), I wanted to go through a few of the pros and cons of having a card. I want to show that having a credit card is necessary and isn’t necessary. It all depends on your personal situation, preferences, needs, and goals. As I said above, having a credit card is a personal decision and you shouldn’t do it if you don’t feel comfortable with it.
But first, before we get into these pros and cons, I wanted to share with you a strategy that I have found very successful. While this doesn’t mean that you should, in fact, have a credit card, it does show that you can use one effectively and responsibly. My strategy is to only have one credit card, especially if you have had trouble in the past meeting payments. Having a single card is even more important if you are struggling with debt.
I use my credit card almost solely for emergencies (which means that I don’t use it a lot). When I do need to use it in a non-emergency situation, I make sure that I actually have the sum of money (in my bank account) that I’m using it to cover. This helps me assure myself that I will be one hundred percent able to cover the bill on time.
A ‘one card’ credit card strategy is something that I have heard numerous debt and credit experts recommend. Of course, it is not possible for everyone but it is certainly something to think about.
Anyways, back to our question. The best way that I have found to answer it is by looking at several off the pros and cons of credit cards. And that’s what I’m going to do below.
Credit Card Debt
Perhaps, the single biggest benefit that not having a credit card brings to you is that you will never have any credit card debt. Without a credit card, it is plain old impossible to rack up this specific (and very nasty) type of debt. However, and here is the con of the matter, not having a credit card for those instances when you really need one, those instances where you might not have enough money to cover a purchase, might force you to borrow money from family, friends, or even a loan shark. And this can be much more harmful than having a little credit card debt to pay off.
Going through life without a credit card means that you will have to think hard before making any purchases. Because you can’t just whip out the plastic, you will have to only buy things that you really want, need, or have considered deeply. As far as the cons of this go, there really aren’t any. Even when you have a credit card, you should still be smart about how, where, and when you use it.
The main reason to have a credit card is so that you can buy the things that you might not have enough money to normally buy. Now, I don’t mean something expensive for pleasure or entertainment, rather I mean this as far as credit goes. Having a credit card helps you build credit which can help you make a major life purchase like buying a home or a new car. These things can be very hard to do without a credit card if you don’t have the cash on hand.
Yes, the fact that owning a credit card is one of the only ways to build credit in this day and age is a very important thing to take into consideration. When you don’t have a card and haven’t built your credit score up in the past, then lenders will be much less likely to loan you money. If you’re in a pinch, this can be a major problem. But, at the same time, if you do have a credit card and you are not a very responsible borrower, you can find yourself in just as much, if not even more, trouble. Misusing a credit card and running down your credit score can make it all but impossible to take out a loan when you need to.
Yet another major benefit of having a credit card is convenience. Sometimes it is just much easier to carry a piece of plastic than it is cash. This is especially true if you are going someplace (such as an event or a vacation) where you are unsure of how much money you will spend. A credit card is also all but necessary when it comes to online shopping and e-commerce. Without them, that whole industry might fall apart.
So, what’s my final verdict with credit cards? Are they really necessary? Well, I suppose I already answered that question above by giving you the low-down on my plan.
I think that having a single card is always a good idea. I also think that having multiple cards doesn’t necessarily have to be a bad thing if you are absolutely positive that you will be responsible with your monthly payments. Meeting your credit card minimums is essential in that it will keep both your personal financial health and your credit health where it needs to be.