Do You Really Need a Credit Card When You’re Starting Out?

If you’re just getting started, financially, you might be wondering whether you actually need a credit card. Maybe you’ve heard bad things, that you can land yourself in serious debt if you’re not careful with a credit card. Or, maybe you’ve just never considered that you might need a credit card. After all, who wants to spend money before they even have it, right?

Well, this is a bit of an oversimplification. There are a lot of great things about credit cards that can make them extremely useful, especially for people who are just getting started in their careers and getting their finances together. Here are the top reasons you should get a low-limit credit card, even if you don’t plan to use it for much.

Building Your Credit

When you’re newly starting out with your finances, you’re not likely to have much of a credit score to speak of. This isn’t good! You need a good credit score to qualify for things like loans, which you’ll need to get a house, a car and the like. Without good credit, things are just generally tougher. One of the best ways to build credit is to apply for a low-limit credit card and use it regularly.

Our advice would be to use the card for simple purchases, recurring things like groceries, and pay it off right away. As long as you don’t carry a balance from month to month on the card, it actually won’t accrue interest, allowing you to build your credit without having to actually pay anything. This is a huge help when you’re just getting started, as loan will require you to pay back interest. This makes credit cards one of the lowest-risk ways to build credit.

In Case of Emergency

There will be times when you need to spend some money and there’s nothing you can do about it. Your car might pop a flat tire, or you might find yourself suddenly facing a broken HVAC unit in the dead of winter or height of summer. In these scenarios, applying for a loan might be time-consuming and stressful. You could, instead, put the charge on your credit card and pay it back as soon as you get paid.

This emergency use isn’t something you’d do all the time, either: just when you need the boost. It’s better to have the card already on hand for when you need it, too! When an emergency comes along, applying for a credit card is just as time-consuming as trying to get a loan. So, what are you waiting for? Get yourself a simple, low-limit credit card today and start building that credit, and be prepared for emergencies in the event they pop up!

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