Here’s a piece of advice for all you seniors (and other 18-year-olds) out there without a credit card: go get one.
No, Capital One isn’t paying me. I’m just trying to help you out.
If you’re already using a debit card, there isn’t really any reason why you shouldn’t have your own credit card as well.
And there are endless benefits.
Just yesterday, I used my credit card to allow me into the London Underground. All I had to do was place my card on the yellow scanner and enter the subway system. (My debit card wouldn’t have worked because it’s from a foreign country.)
In addition, most credit cards offer rewards or cash back for just using the card to purchase items.
That’s free money; who wouldn’t take it?
Not only do they put extra cash in your wallet, credit cards also offer much more protection than debit cards.
According to federal law, the maximum liability for a credit card customer who reports it stolen or lost is $50.
On the other hand, a debit card holder who reports a card lost or stolen within 48 hours of discovering it gone could be liable for up to $500. And after 60 days, there is no limit at all to what they could be liable for.
Probably the biggest plus to using a credit card for young adults is that they’re building their credit.
While most students aren’t going to need a good credit score any time soon, it doesn’t hurt to start early.
Consumers also have plenty of options to choose from due to the many credit card companies who have multiple options to pick from.
Take the “Discover it” for students, for example. It has 5 percent cash back in rotating categories such as restaurants or Amazon, and 1 percent cash back on all other purchases, not to mention that all cash back for the first year is matched at the end.
Plus, Discover will waive your first late fee.
But fees are one of the reasons credit cards have such a bad reputation.
Late fees can range from $30-$50, but that’s nothing compared to debt that can balloon from not paying the full balance at the end of the month. The debt will accumulate interest, and that can become very expensive over time.
So young adults have to use a credit card as they would a debit card. That way they don’t have to worry about fees or growing debt.
Just make sure you have enough money to actually pay for what you’re buying. And then reap the other benefits!
—By Adam Dean