Should I get a credit card?

[Firiel]

I'm 26, and my financial situation is stable.

 

I live independently from my parents, though I do still have a roommate. I don't make a ton (~$30,000/year, before taxes), but it's a stable job with good benefits. I am paying off my school loans faster than required and will have them paid off by the end of the year. Once I'm done paying off my school loans, I intend on saving up 3 months pay. I'm good with money-- I can't remember ever being "in the red" unless it was planned for (for instance, dipping into savings for a good deal on a needed used car). My checking account always has a month's worth of income in it at the beginning of the month, and I have a $1000 savings account for any larger unexpected expenses.

 

I've been wondering if I should get a credit card. I see two advantages: 1) I would build credit and 2) I may get some ancillary benefits, like rewards points. Honestly, I'm not terribly worried about emergencies. Even though I'm completely financially independent, I know that if I am in a really bad pinch (say, hefty, unexpected medical expenses), my parents would loan me money interest-free. And I would pay them back in a timely fashion on a well-regimented payment plan. So I wouldn't have a card "just in case" of emergencies. The credit is the main reason. I'm unreasonably scared that I'll go crazy and get into a million dollars of credit card debt, though I have no reason to actually think that, considering my previous fiscal responsibility.

 

So whaddya all think? Should I take the plunge and get a credit card?

[blueidealist24]

It sounds like you're good with money, and it is good to build a good credit rating (if you need a loan for a house or another car in the future, that'll help), so why not? If you're afraid you'll be tempted to use it, just don't carry it around with you unless you're going someplace far where you might have an emergency. Put it in the bottom of a drawer or i the back of a cupboard where it's not easily reachable until you need it.

[poetryandlyrics]

I think you're overthinking this.

 

It's wise to build up your credit for things you'll want in the future. Unless you plan not to get those things, then it's moot.

You say you've proven to yourself that you're financially independent anyway.

[Fudgie]

I have 2 credit cards that I use on "regular" purchases and then pay off. This is how I've been building my credit for the past 2 years.

 

You are fiscally responsible. I say you get one and use it to build credit. You won't end up in debt unless you yourself decide to NOT care and spend, spend, spend.

[Edmund Exley]

Its all about discipline and remembering that credit cards aren't extra money

[BigKK]

For sure get one. Don't use it as actual credit, just use it to pay your normal stuff, and pay it off immediately. Never use it to buy things you can't afford at this minute.

[Cheetarah]

Credit cards are not evil spawns of the devil, unless you use them irresponsibly.

 

And use it. You can't build credit with it just sitting there in your wallet. People hang onto credit cards for emergencies, but then their credit is never really built because it is sitting in there collecting dust. I used to use it for say, groceries a few times a month - Just set that cash aside/transferred to my savings, the amount that I used for groceries, then paid in full by my due date.

[Furbys]

I buy everything with my credit card and then I will pay it off on the same day. Its a great way to build good credit.

[Snny]

Your credit card, along with maintaining apartment rent and utilities under your name will establish your credit history if you ever were to buy a car from a dealership, apply for a bank loan, or be eligible for house mortgage. I've had mine since I was 18, have been very responsible, and had a very high credit to purchase a sportscar from a dealership because of it.

 

Start off by using it as a "gas card" or emergency groceries only. Don't use it for more than 2 things or you will break your boundary. If you aren't a compulsive buyer, I wouldn't worry about using it irresponsibly.

 

Unfortunately... I hate to break it to you... your student loan has very little impact on your credit history. I was late on 4 payments (one of them was almost missed)... and I still have a very high credit. I wouldn't just rely on student loans to build credit alone since they are so easy to defer- you need something more grounded.

[MisUnderstood9]

I would get one because it help built your credit. Use it for things you already have money in your bank for such as groceries, gas bill, phone bill, gas in the car and then pay it off immediately once you are home.

 

Also to save yourself from getting into debt with a credit card, set the "credit limit" of the card to atleast less then half or your monthly income. Ex. You make say 2300 a month -- credit card limit of 1000. This way you never exceed what you make. If they try to offer you a higher credit limit you are allowed to say no. I have 2 cards, each are 500 limit -- I use one main just for gas and groceries. The other I have set to have my recurring month payments come off of such as my phone bill, utilities etc and pay both off right away once a payment or I have used it.

[Edmund Exley]

Careful here. Low credit limits can lower your credit score. The key is debt to available credit ratio.

[Lorem Ipsum]

Aside from what everyone else said about being responsible/paying it off every month (don't carry a balance)/build some credit... you also need a credit card for certain things like car rentals or renting a hotel room (when you check in, many places charge an amount to your card as a safeguard so if you trash the room, they've already taken their payment, when you check out, it's voided). There are simply some things that are hard to get or buy if you don't have a credit card.

 

I think your attitude is good, you're not going "Whoo-hoo! Free money! Cabo here I come!" but you're genuinely concerned about it, which you should be because using one (or several) improperly can land you in a heap of trouble.

[Edmund Exley]

Aside from what everyone else said about being responsible/paying it off every month (don't carry a balance)/build some credit... you also need a credit card for certain things like car rentals or renting a hotel room (when you check in, many places charge an amount to your card as a safeguard so if you trash the room, they've already taken their payment, when you check out, it's voided). There are simply some things that are hard to get or buy if you don't have a credit card.

 

I think your attitude is good, you're not going "Whoo-hoo! Free money! Cabo here I come!" but you're genuinely concerned about it, which you should be because using one (or several) improperly can land you in a heap of trouble.

 

You can now use debit cards for both. They just hold a percentage of funds higher than the estimated total.

[Firiel]

Okay, thanks, all! I'll get started on that process. I know that credit cards are neutral and that it's the way they are used that makes them positive or negative, but I just find myself overly worried about my own abilities. I'll probably get a credit check beforehand.

 

I'm going to feel like a real grown-up when I get a credit card!

[Fudgie]

Careful here. Low credit limits can lower your credit score. The key is debt to available credit ratio.

 

Agreed.

 

Just because you have a high credit limit doesn't mean you HAVE to use it. I have over $4,000 in credit between both of my cards. What is my monthly income? $1,200 after taxes. HA! I don't use all that credit though, of course. It looks great that I have all that credit but I'm not going to use it because I don't want to go into debt.

 

Okay, thanks, all! I'll get started on that process. I know that credit cards are neutral and that it's the way they are used that makes them positive or negative, but I just find myself overly worried about my own abilities. I'll probably get a credit check beforehand.

 

I'm going to feel like a real grown-up when I get a credit card!

 

It's pretty cool! My advice is to get one that gives you "cash back" on groceries, gas. I get lots of cash back on mine and I love it. 6% on groceries.

[Firiel]

Careful here. Low credit limits can lower your credit score. The key is debt to available credit ratio.

 

So should I wait until I finish paying off my school loans, do you think?

[annie24]

You should get a credit card now and build up credit. Maybe just to put a recurring fee (like your gym membership) on there. You'll need that history when looking to buy a house. My mistake was using my credit cards too freely, and now I have a huge chunk of debt that is hard to get out of!! The good news is that I'll have it paid off this year. But man... It's tempting to use it like free money, but don't! I now use debit for everything.

[Lorem Ipsum]

You can now use debit cards for both. They just hold a percentage of funds higher than the estimated total.

Maybe I'm just paranoid, but I would hate to use my debit card like that. I don't like letting businesses know my banking information. Every time my debit card has been compromised, I've asked which store had their information stolen and I *never* get an answer. At least if you buy it on a credit card you've got some degree of protection. Frankly, if some store's database has gotten hacked, I'd like to know that so I won't use my debit card with them again. This is also part of the reason why I prefer to pay cash if I'm not using credit.

[itsallgrand]

Why not go down to your bank and/or credit union and see what is available for you, if you haven't already. Get an idea of what kind of card you want, what kind of interest rates you would be looking at, what kind of fees, etc. There are so many different kinds of cards!

 

I think so long as you do your research, are responsible with your money, and know what you are signing up for with the specific card you choose, then a credit card can be a useful tool to have at your disposal. I hate using credit, honestly - and I have a credit card. It has its uses.

 

There are even sites out there now that help you to compare cards and find one that is right for you. I'd suggest this alongside simply going by what your specific bank tells you and offers you.

 

And if you really wanted to, you could get a secure card. Where you put down money (usually a few hundred dollars) and after you have used the card for X amount of time responsibly, you get this deposit back.

 

So yeah, I don't see why you shouldn't get one. Just find the right one for you.

[sophie274]

I've had credit cards ever since I graduated from college. I have many many times my monthly salary in total available credit (plus I dont even have a salary right now!) I've never even been tempted to buy something I couldnt pay off at the end of the month, and I've never ever carried a balance. If you are responsible, it's really nothing to be scared of. If you don't start building a credit history soon you will have a very tough time if you ever want to buy a house, for example. I'd definitely get the card.

[catfeeder]

No, get one as soon as you can while you're still on the books as a responsible payer of your loan. I had a friend who didn't do that and she had trouble later because she was considered a 'ghost'. Apparently, being one of those is worse than bad credit.

 

You're a responsible person, you'll handle the credit well. I'd just avoid using the thing for gas if you're in a state that allows stations to charge more for using credit. Cash back on an extra dime or more per gallon isn't worth it. Gas is the only thing for which I pay cash.

 

EnjOy.

[Edmund Exley]

So should I wait until I finish paying off my school loans, do you think?

 

I don't think it would hurt to just keep one in your pocket. You seem pretty financially sensible based on your description of habits.

[Snny]

So should I wait until I finish paying off my school loans, do you think?

Like I said in my last post here, don't rely on student loans to build credit. You need to get on this sooner than later.

[reader]

A credit card is necessary for any working adult because unexpected things happen all the time.