If Everyone Wants to Pay Off a Credit Card, Why Bother Having It?

"Okay, Generation Millionaire…you keep telling us to pay off those credit cards… Why should I bother getting one? Wouldn't I be better off living on a cash-only basis?"
~A Credit-less College Student

 

 

Dear Credit-less College Student,

 

We never said credit cards were bad but when they are poorly managed, they can be very hurtful! Credit cards actually can work to your advantage if YOU remain in control versus letting your credit cards control you! Here are a few benefits to establishing credit (even though we want you to keep it paid off!):

 

1. You can shop online! (We surprised you didn't we…you didn't expect that one to be number one!)
   
2. Emergency money in case the car breaks down, the furnace breaks, or other unexpected expenses arise (notice, we didn't mention emergency Starbucks-runs!)
   
3. Rewards… Credit card companies do offer some pretty cool incentives to keep you using plastic.
   
4. Establish credit for the BIG purchases you want to make. Unless you are Bill Gate's heir – chances are good you aren't going to buy a house while living on a cash-only basis.
   
5. If you drop your wallet or leave your purse hanging on the back of a chair at Starbucks (we didn't say you can't EVER go there!), your bank won't reimburse $100 in cash. But you can put a stop to unauthorized spending on a credit card (just be sure to report it quickly!)
   
6. As a piggy-back to # 5, it's safer to vacation with plastic versus cash. If your canoe mate tips the boat – your plastic credit card dries quicker than cash.
   

 

I hope we've answered some of your questions… Get credit established…just don't spend more than you can afford to pay off every month (or at least within a few months!)

 

Your friend,

Generation Millionaire