The age old question! A few years ago, getting a credit card may have been a given. Many people see it as a rite of passage after getting a full-time job. But do you really need a credit card?
Some will say that having a credit card is easy and makes sense for them. While some will have never signed up for one and will rely on their debit card instead. For some people, having a credit card is straightforward. You pay for things using the card, you wait for the bill, you pay it off. What could be simpler!? The problems begin to arise when the bills get out of hand and you find yourself in debt. So - what should you do?
The Brain on Credit Cards
As outlined above, having a credit card may seem pretty simple, but that’s not what our brains think. Statistics have shown that people who have a credit card (particularly one with a large limit) are more likely to have unhealthy spending habits, and buy things they don’t really need, or even want.
Additionally, a credit card can cause an amount of background stress. Having a credit card (or multiple) will mean you have one (or multiple) extra bill to think about. This may seem like a small thing on its own, but these background stressors are what can begin to affect our day to day life in a serious way.
Credit Card Benefits
There are, of course, some very appealing reasons to sign up for a credit card. Perhaps the most obvious of which is the ability to borrow from your future self. If something comes up, like an emergency medical issue, or a broken down car, and you don’t have the cash, you can put it on your credit card and pay later. When it comes to emergencies, a credit card can be extremely helpful. Credit cards can also be useful when travelling (however are not mandatory), and can, with responsible use, help you build your credit score.
Making your Decision
Weigh up all the options before getting a credit card on default. Remember that there is always a way around using a credit card. In lieu of using a credit card for emergencies, you can build an emergency fund. Instead of relying on a credit card to build your credit score, you can focus on paying your bills ahead of time and not overdrawing your account. However, if you still want a credit card, start off with a small limit, spend thoughtfully, and always pay your bills on time.