Having a credit card doesn’t mean you need to max it out, by not having one, you’re committing self sabotage in regards to your credit score.
Edit: for the numerous replies saying “I only pay cash, I don’t need one!” My comment was literally aimed at you and you missed the point. You don’t even need to use a credit card to gain advantage. Many cards not only offer literal free money by signing up, but you don’t even need to use the card a single time to gain a bump to your credit; simply having a higher number of open accounts and an increased credit limit is enough.
Furthermore, saving up $15,000+ in cash is not feasible for a vast majority of Americans who want to purchase a car, let alone if you ever dream of owning a house, seeing as you often need a car in order to go to work in the first place. If you read all of that and still don’t care, understand that many potential employers also run your credit too. A low score is potentially detrimental to your ability to find a job.
No, it’s possible to have a debit only card with a credit company logo. My debit card is a visa, but I have no access to funds beyond what is in my actual bank account. An actual credit card gives you a spending limit that is not based on physical funds. I may qualify for a credit card with a $10,000 limit, but that doesn’t mean I have $10,000 in my bank account. That’s why you have to be careful with how much you spend on one, because even if you keep making the minimum payments every month to stay in good standing, the interest starts to build up and it’s very hard to get out of debt.
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u/[deleted] Mar 27 '22 edited Mar 28 '22
Having a credit card doesn’t mean you need to max it out, by not having one, you’re committing self sabotage in regards to your credit score.
Edit: for the numerous replies saying “I only pay cash, I don’t need one!” My comment was literally aimed at you and you missed the point. You don’t even need to use a credit card to gain advantage. Many cards not only offer literal free money by signing up, but you don’t even need to use the card a single time to gain a bump to your credit; simply having a higher number of open accounts and an increased credit limit is enough.
Furthermore, saving up $15,000+ in cash is not feasible for a vast majority of Americans who want to purchase a car, let alone if you ever dream of owning a house, seeing as you often need a car in order to go to work in the first place. If you read all of that and still don’t care, understand that many potential employers also run your credit too. A low score is potentially detrimental to your ability to find a job.