Good point.
Using a credit card is important to establish credit. What's more important is NEVER GETTING INTO DEBT.
Using a credit card is important to establish credit. What's more important is NEVER GETTING INTO DEBT.
This is actually a serious question -- I've been in the US for three years and I haven't bothered to acquire a local credit card, so my credit report is completely blank. Are there circumstances under which this can come around and bite me in the arse?
Never spend money you don't have, just charge things to your card and pay it off at the end of the month (or carry a balance a couple of months at a time once in a while, some people say this improves your credit score, and some companies will get pissed and cancel your account if they're not making at least some interest). Then, if you ever need it, that credit history will be there, and it is often used for things besides debt. They generally check credit when you go to rent an apartment, etc. Some people are even checking the credit of job candidates now. It's good to have good credit history.
Isn't a debit card better for that?
Having a credit card is like having health insurance. Insurance allows me to reduce my risk of going broke. Hopefully you never have to use the insurance, and the average expected return may favor not having insurance, but the return is worth it. In the same way, having good credit and a credit card (even if you pay in full each month) allows you another option to get out of some sticky short term cashflow situations.
The big difference between credit cards and health insurance is that you can use credit cards and keep your expenses the same, while health insurance is an additional expense. So you can spend the same amount with or without a credit card, but gain free financial insurance.