Why Do I Need My First Credit Card?

“Why?” is the first question you should be asking. With all the horror stories you have heard about getting deep into debt, why should you even get your first credit card at all? There are indeed several very legitimate reasons for you to begin your foray into the realm of plastic. I will hit on this time and time again, but the most important thing to remember through all of this is to be aware. Aware of how much you spend, how much you are charged, and what your credit score is. If you remember to do this there are many reasons why you will want to have a credit card. I want to begin with three main reasons: Building your credit, emergency use, and purchase flexibility.

Building Your Credit

A first credit card is an ideal way to prepare for later in life. Imagine 5-10 years down the road, not being able to buy a house because your credit is in the toilet. No one buys a house with cash so having a decent credit score is absolutely necessary. And you get good credit by consistently using the credit you have in a responsible way. The first and easiest way to do this is by getting your first credit card. (Learn more about your credit score in general here)

At various points throughout this blog we will discuss other ways to build your credit score successfully, but what it all comes back to is that the easiest and quickest way for you to build credit now is for you to responsibly use a credit card over a period of time. That time can really vary, but it may take months to years. All the more reason to get started now and not be behind. If you are worried about handling your first card we have several posts to help you, including 13 tips for your first credit card.

Emergency Use

A large majority of people out there do not carry cash anymore. Why? Cause they can carry a single piece of plastic that does the exact same thing. Your credit card can be great in those times that you wish you had a bit of cash. Even if you don’t have the cash in your bank account, your credit line can help you out for a bit until you do. Just make sure you keep your “emergency” spending under control.

In addition, it may be a wise plan to keep this credit card out of your wallet. If you are worried about overspending, stuff it in a drawer and only use it to pay regular bills like rent, utilities, and the like. A friend recently had his wallet stolen with a sizable amount of cash and all his debit and credit cards. Had he taken this advice he wouldn’t have spent the past week biting his nails stressed over money. In fact, he even went back to having to write checks for things like groceries (He quickly ran out of checks, but that’s an entirely different story). The point is, be prepared and make sure you know how to handle your credit card.

Purchase Flexibility

Some places don’t accept personal checks (My buddy also found this out with his credit card gone), some places don’t take cash (think amazon or walmart.com). Credit cards give you the flexibility to almost always be able to pay in a variety of different situations. With new payment methods like Paypal becoming more and more popular credit cards haven’t gone away/ They’ve really just become more and more secure. Now you can get online and make a payment to Paypal (A third party company that you trust) who then turns around and pays the other party in your transaction. This added level of security has really opened up who I trust with my money online these days. (Maybe not a good thing, haha.  I tend to spend more than I should.)

Credit cards as a replacement for cash have been a huge advancement just as I would suggest that other forms of payment will continue that advancement. The one thing we still see constant even in these other payment forms is the principle of credit. Credit is really just trust. Trust that you will pay back what you are loaned. Trust is really not that new and we’ve never really been that good at it as a species :) . Anyhow, I digress. The point remains, there are many, many useful things you can do now with your credit card for protection, security, planning ahead, and more.

To rephrase my original question: why would you NOT get a credit card? As much as it helps there are still reasons to be careful when choosing your credit card and even once you have the card.

Author: Jeffrey Kingston

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