Don’t shun credit because you’ve had trouble with overspending in the past. A strategy of taking on credit in small doses is better for you, says Sally Herigstad.
The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.
The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.
Dear To Her Credit,
The fact that you look far enough ahead to want to avoid racking up credit card debt demonstrates that you are already far more financially savvy than many people. Now if we can just bring the rest of your financial life into consistency with that wisdom, you can make real progress on your money situation. You can start to give yourself some credit — even trust yourself — and feel more secure about your future.
It is important nowadays to have some form of credit. Why?
• You need to build a credit record. You never know when you might need credit, and by then it’s too late to build a good credit history.
• Credit offers consumer protection that cash does not. When you buy something with cash and it breaks or doesn’t work out, your only recourse is to find the seller and convince him to refund your money. If you bought it online, or if the seller is uncooperative, you’re stuck. If you buy the same item using a credit card, the credit card company offers you some security. If you have a dispute with a merchant, the card issuer may step in as a middleman, withhold payment to the company until the dispute is cleared up in, and even “charge back” the money involved, making the merchant eat the cost. In my experience, sellers are more cooperative when a credit card is involved.
• A credit card is also safer to carry around than cash. When I was 23, I cashed my two-week paycheck and put the money in my brand-new purse. My purse was stolen at the movie theater that night. Goodbye new purse and paycheck! If I had had a credit card in my purse instead of cash, I could have called the bank and had it canceled. I’d have only been out the cute purse.
• Side benefits: Purchasing things on credit helps with record keeping. You can look on your statement and see where your money is going. And don’t forget the perks! You’re buying things anyway. Why not take advantage of cards that return a percentage of your purchases to you in the form of store certificates or airline miles? I have one card that gives me airline rewards and another that sends me $25 department store certificates.
You can build a credit history without allowing yourself to slide into debt. Consider getting a secured credit card. That’s a card that requires you to have as much money on deposit at the bank as you are allowed to spend on the card. This is an easy type of card to get, because the bank isn’t at risk. You’re not allowed to spend more than you have, so you can’t go crazy. Or, apply for a credit card or department store card with a very low limit. If your limit is no more than you can pay off every month, you can learn to use credit safely.
You’ve demonstrated enough willpower to stay out of debt. Now start trusting yourself a little more. Practice controlling your spending with the convenience and safety of a limited amount of credit. You can do it!
See related: Charge-backs: How to dispute a credit card bill with a merchant
Sally Herigstad writes about women and credit every week for CreditCards.com. Herigstad is a writer and finance consultant for MSN Money, a personal finance software product. She is also a member of the Washington Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Her website is http://helpicantpaymy bills.net. Sally Herigstad lives in Kent, Wash., with her husband Gary. They have two grown children, Valia and Grant.
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.