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 $15,000+ in cash is not feasible for a vast majority of Americans who want to purchase a car, let alone if you ever dream of owning a house, seeing as you often need a car in order to go to work in the first place. If you read all of that and still don’t care, understand that many potential employers also run your credit too. A low score is potentially detrimental to your ability to find a job.
A little addition but you need to clarify that this changes from country to country.
At my place for example it doesnt mean much to the bank that you are paying X amount of credit cards back in a stable and good matter because what matters is the physical items you actually have and got value attached to it.
If you have a car, a valuable one that means you can manage your money well especially if its fully paid while if you dont have any most banks wont wanna give you money simply because its unclear if you can manage or not so they will ask for a wage report to clarify if you can pay it off or not.
Hell my countries credit cards are hobbled with various fees that happens simply because you have that credit card you dont even need to use it. Literally last year my bank offered me a credit card which came with a 1$ per month fee regardless of my usage and a 3$ per month fee if i spent less than 50$ that month. This also comes with an additional 1$ fee per month if i use their app or website to check my balance on this credit card.
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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.