Why A Credit Card Is A Must Have

Having a line of credit associated with your name will help you out in many ways than one, as you get older.

Tell me what a credit card is, ‘cus I’m scared. I was too. It is a loan. Usually, you’ll start out with a card that, on average, has $1,500 on it. From there, you spend money just like you usually do: gas, bars, food and Starbucks. And then one month later, you need to pay off the minimum payment on your credit card. This minimum payment is a small percentage of the total amount of money you spent in one month. Wait this sounds awful, why should I sign up for loans and sh*t? ‘Cus it will get you that apartment you want, a lower monthly payment on your car, and it can help you and your loved ones when you are stripped for cash.

1. Emergencies

God forbid something tragic happens and you need to travel somewhere or buy something that ain’t so cheap. With a credit card, you will have upwards of $1,000 available to spend on whatever. This means if you have been responsible enough to stay within your means, you can be prepared when a problem strikes. For example, you can buy an emergency plane ticket home, purchase a hotel for the night, or buy the meal for you and your 8 friends because the waiter can’t split the check.

2. Build Your Credit

Remember those cheap credit score commercials?? Hahaha. Well, your credit score is like a G.P.A. Your future landlord, car salesman, and mortgage broker will look at your credit score before you make a big purchase. The higher your credit score, the better. Your score is determined based on a whole bunch of stuff, including if you make your monthly payments on time and how long you have had a line of credit (aka: a credit card). Beginning your credit card journey when you’re young will help you get an edge in that apartment you want, and will help lower your monthly payments on a car. Something to think about!

3. Cashback and Miles

The way I see it, you could spend $40 on gas with cash or your debit card. Or you could spend $40 on gas, and also get $2 cash back. Credit card companies entice you to use their credit card over another company by offering rewards. Basically, you earn points, cash back or miles on every purchase. Each company offers different rewards systems. The fact of the matter is, you get free stuff just for using their card. The only catch is that you are spending this money on a loan, which means it is not your money, it belongs to the bank. These rewards systems need to be taken advantage of by every young person trying to save money.

4. Your Check Is Late

Credit cards are your savior when your work check is late, or you are transitioning between jobs. Regardless of your checking account, your credit card will have available funds in it if you pay off your minimum payments regularly. This means if you go out on a date literally one day before you get your work check, you can still pay for your night out.

5. Tough Times

This is similar to emergencies. If either just yourself, your family, or your loved ones are struggling to make ends meet, your credit card can be a saving grace for the time being. It will give you the money you need to buy food, while also giving you the time you need to make the money to pay off your credit card payment. This has helped me several times. A debit card simply cannot protect you when life happens and you need money.