by Sophia Carpenter

Obtaining a credit card is one of the first big steps we take in our own personal financial journey. They can be really exciting…but they can be scary, too. Credit card debt can quickly snowball if you’re not paying attention. The key is to buy only what you can afford to pay for each month so you pay the bill in full monthly and don’t let a balance carry to the next month. There are many benefits of credit cards, when used responsibly. 

I was recently talking to someone in their late twenties who still had yet to open a credit card. They had built their credit in other ways and practiced impressive budgeting skills. This just goes to show that there is no set timeline on your unique finance journey. So here are a few benefits of having a credit card, if you are interested in using one: 

1. Building Your Credit Score

A credit card is an accessible way to start building your credit score. Particularly if you don’t have other lines of credit open, this can be a way to start demonstrating how responsible you are. When you go to rent your dream apartment, the landlord might express interest in seeing that you could be a reliable tenant. Or perhaps you’ll need to take out a loan to buy the perfect car, you’ll want to qualify for the best loan with a good credit score. 

To learn more about credit scores and how to improve them: check out What’s in a Credit Score

2. Serving As Fraud Protection

Credit cards can also act as a shield to protect you from inaccurate billing and fraud. The process to dispute credit card charges varies, so if you run into this situation read over your credit card company’s procedures. If you are a victim of credit card fraud, that is, unauthorized charges show up on your bill, reach out to your credit card company as soon as possible. Most companies have generous policies to protect their consumers and you should not be  held responsible for unauthorized charges. Additionally if a seller charges you incorrectly (say, you canceled Netflix, but they charge you for the next month) or if a seller does not complete their end of an order (your Nintendo Switch never gets delivered, an unfortunate example that I experienced recently), you can dispute this charge with your credit card company, and they will advocate for you.

3. Protecting Your Checking Account

An added benefit of a credit card is that if someone gets a hold of your debit card number and fraudulently uses it, they have access to all of the cash in your account. If they obtain your credit card number, they have no access to your actual cash. Plus, you can dispute those charges! 

There are so many tools out there to find the right credit card for you. If you’re a student, consider credit cards that fit the student lifestyle. If you like to travel, look at credit cards that give you miles or points at hotels. Pay attention to details like annual fees and interest rates. NerdWallet has some nifty (free!) pages comparing credit cards. 

Credit cards which offer cash back rewards give you an established percentage back on each purchase. There are different cards which will be best for distinct lifestyles. As a college student, I have a credit card that gives me 1% back on all purchases–but 3% back on groceries–because that’s where I spend most of my income. You can even use these points as payment toward your credit card bill, thus decreasing your purchasing costs.

If you have strong budgeting skills, then you could take advantage of the benefits of credit cards. The process is not as hard or as scary as it may seem. Wait until you feel ready to handle the responsibility and then enjoy swiping that baby for the first time at your local Starbucks.