Should I Get a Credit Card?

Yes, you should get a credit card. More specifically, you should get your own credit card account if you’re at least 18 years old, and you should get a parent to make you an authorized user on their credit card account if you are too young to get a credit card alone.

There are many reasons to get a credit card, including convenience and earning rewards on purchases, but the best benefit is building the credit history needed to eventually land great interest rates when you need to borrow a lot of money, such as for a home or a vehicle.

7 Reasons Why You Should Get a Credit Card

1. Credit cards help build credit.

Every month you pay your bill on time and keep your account in good standing, credit cards report good information about you to the credit bureaus – even if you don’t use the card at all. That’s why having a credit card is one of the best ways for you to build credit. Credit cards also help your credit score by adding to your overall credit limit. In addition, they can contribute to the diversity of accounts on your credit report if you already have another kind of credit like a personal loan, student loan or mortgage.

Using your card responsibly goes beyond just paying on time, though. It’s also important to keep your credit utilization, or the percentage of your credit limit that you’re using, below 30%. Exceeding this percentage can have a negative impact on your credit score. Usually, only the utilization percentage on the last day of your billing cycle gets reported, though, so as long as you pay your balance down before then, it’s fine to spend as much as you need to in a given month.

2. Credit cards are convenient.

Credit cards – especially Visa and Mastercard – are accepted nearly everywhere in the world, and they’re much easier to keep track of than a wad of paper currency.

Plus, credit cards allow you to buy things without needing to have money on hand to pay for them immediately. Your due date is 21-25 days after the end of your billing period, which means that purchases made at the start of a billing period won’t come due for up to 56 days.

Another element of credit cards’ convenience is how fast they work at checkout. Counting out cash and getting change, or writing out a check, takes much longer than the few seconds required to insert or tap your credit card. Credit cards also allow you to easily make purchases online or over the phone in seconds, especially if you save your card information in a mobile wallet.

3. It’s easier to deal with credit card fraud than debit card fraud.

All credit card networks have $0 liability guarantees for fraudulent transactions, which means you’re not responsible for any unauthorized charges on your card as long as either you or your credit card issuer catches them.

When credit card fraud takes place, it’s usually a simple matter of calling the card issuer to get the charges taken off your account. Your issuer will also cancel your old card and send you a new one with a new number, expiration date, and security code to prevent further unauthorized purchases.

Debit card fraud isn’t as easy to deal with because it involves money that was taken from your bank account.

4. Many credit cards offer rewards on purchases.

Most people welcome free money, and that’s exactly what credit card rewards are. With the best rewards credit cards, you can get up to 6% back on some types of purchases, or up to 2% back on every purchase with a flat-rate cash back card.

Some credit cards even let you choose the spending categories in which you get bonus rewards, or automatically assign them to whatever categories you spend the most in each month. There are also tons of different travel-focused cards, including ones partnered with major airlines and hotel brands, and plenty of retailers offer co-branded cards and store cards that offer rewards in their respective loyalty programs.

5. Credit cards provide free supplemental benefits.

Credit cards often come with a variety of supplemental benefits. Even cards with $0 annual fees provide some of these benefits, but cards that charge annual fees are more likely to have premium perks. Some common credit card benefits include:

• Purchase protection
• Return protection
• Price protection
• Extended warranties on purchases
• Travel insurance
• Rental car insurance
• Cell phone insurance
• Reimbursed fees for TSA PreCheck or Global Entry
• Airport lounge access
• Priority boarding or free checked bags
• Automatic elite status in certain loyalty programs
• Yearly or monthly credits for certain types of purchases
• Discounts at certain merchants

You can learn more from WalletHub’s credit card benefits guide.

6. Credit cards can help you finance purchases or balance transfers over time.

If you’re looking to finance a large purchase over time, credit cards can be one of the cheapest ways to do that. Many credit cards offer an introductory 0% APR for 6 to 24 months. If you pay off the entire balance you owe during that period, you won’t owe any interest. Any remaining balance at the end of the promotional period will start accruing interest at the card’s regular APR.

Just watch out for cards that have deferred interest, which charge interest retroactively on your full purchase amount if you fail to pay in full by the end of the intro period. This is only common on store credit cards, though.

If you have an existing high-interest debt, you can also consider doing a balance transfer to a credit card with a lower APR. The best balance transfer cards offer a 0% APR on transfers for 6 to 24 months. Keep in mind that you’ll need a credit score of 700+ to qualify for both the best 0% APR cards and the best balance transfer cards.

7. Credit cards are better to use abroad than cash or debit cards.

As long as you don’t get a credit card with foreign transaction fees, credit cards are a huge asset when traveling outside the U.S. You won’t have to worry about changing money into local currency because it happens automatically at a low rate with a credit card. In fact, credit cards are the cheapest way to exchange currency in general.

There are a couple caveats to this, though. The first is that some merchants abroad may not accept credit cards, and may even be cash only. That’s why it’s also useful to have a no-foreign-fee debit card in your wallet. The other thing to be aware of is that even with a credit card that has no foreign transaction fees, you can still get extra costs slapped on your transaction if you don’t refuse dynamic currency conversion at checkout. You should always pay in the local currency.

When Should You Get a Credit Card?

You should get a credit card as soon as possible if you’re at least 18 years old. Having a credit card and using it responsibly is the best way to build credit, and the longer your credit history becomes, the better it is for your credit score. There are plenty of great starter credit cards that are available even to people with no credit history, and college students can qualify for some excellent student credit card offers.

When to Get Another Credit Card

If you already have at least one credit card, you can always get more in order to increase your available credit, finance big purchases, make a balance transfer, take advantage of initial bonus offers, or earn bonus rewards in categories not covered by your current cards. However, you should only open a new card if you can afford to make payments on it and it’s been at least six months since your last credit application. It takes time for your score to recover from the hard credit pull triggered by the previous application.

What to Do If You’re Not Old Enough for a Credit Card

If you’re not old enough to get a credit card of your own, you can ask a parent or other family member to add you as an authorized user on their credit card account. This allows you to share their credit line, although the primary cardholder may set limits on your purchases.

As long as the primary cardholder is responsible and pays their bills on time, positive information about the card will appear on not just their credit report but yours as well, allowing you to build credit. Then, once you are old enough to get your own card, you may have a wider range of options.

When Should You Not Get a Credit Card?

There are only a few situations when you should not get a credit card or completely rule out adding another one to your wallet.

• You’re too young. If you’re not at least 18 years old, become an authorized user on someone else’s credit card instead.
• You know it will cause you to overspend. If you can’t control your spending and you know getting a new credit card will allow you to spend beyond your means, you may want to avoid doing so for the time being. However, you don’t need to actually use a credit card in order to build credit with it, so opening a card and then cutting it up is another option. You could also open a secured credit card account because that only lets you borrow against your own deposit.
• You’ve applied for other credit recently. Every time you apply for a credit card or other type of credit, it’ll typically cause your credit score to decrease by around 5 points. Multiple applications in a short period can compound that damage and cause your score to take a while to recover.
• You plan to apply for other credit soon. If you need pristine credit for a different upcoming application, especially for something like a car loan or a mortgage, you should avoid applying for a new credit card. Your credit score affects not only your approval odds but also the interest rates you’ll receive.
• You can’t handle the cards you currently have. If you can’t keep track of the credit cards you currently have open and find yourself missing payments or spending too much, it’s not a good idea to open another.

What Credit Card Should You Get?

What credit card you should get naturally depends on your unique financial situation. But there are a few quick tips you can follow to narrow down the process.

1. Check your credit score. Each credit card has a specific credit requirement (though some don’t require any credit history). You can check your credit score for free on WalletHub to get a better idea of which cards you might qualify for.
2. Get pre-approved. Many major credit card issuers allow you to check for pre-approval on their websites. You’ll be able to see which cards you have good odds of getting approved for, often along with your potential interest rates, all without any impact on your credit.
3. Consider what you want to use the card for. For example, if you don’t have much credit history, you should get a card that’s good for building credit. If you have at least fair credit and plan to always pay your monthly bill in full, focus on finding the best rewards credit card for you. And if you need to carry a balance and finance purchases, consider cards with low interest rates.
4. Get free personalized advice. Joining WalletHub for free gives you access to a wide variety of tools, including personalized recommendations on what credit cards you should get.

You can learn more about what credit card you should get from WalletHub’s helpful guide on the subject.

Bottom Line

It’s reasonable to be worried about the downsides of credit cards – particularly overspending. But don’t give up on building credit as a result. Tools like secured credit cards and automatic payment features can help mitigate the risks for people who are new to credit cards, and you don’t have to even use a credit card to make purchases for it to build your credit history.

Ultimately, remembering these three critical rules of credit card use can go a long way toward ensuring credit is a positive in your life: 1) Always pay your bill in full and on time; 2) Don’t spend more than you can afford to pay every month; and 3) Always read the fine print before you apply. Do those things and your wallet will thank you.