The 5 big credit card fears – and how I overcame them

Millennials fear debt more than death, but leaving those fears behind can do wonders for your financial health


There are certain risks associated with credit card usage, but are they worth not reaping the benefits that credit cards offer?

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My friend and I had a conversation the other day. She wanted to buy a new couch, but all decent ones required quite an investment. I suggested getting a 0% APR credit card that I myself used when furnishing my apartment, but she looked at me as if my advice made her question my mental health.

That made me sigh. Such a common reaction.

Many young people are terrified of debt – credit card debt especially. One survey even suggested that millennials are scared of credit card debt more than dying. These findings can seem a bit dramatic, but they also make sense: The first 20 years of the 21st century have been full of economic turmoil. First, there was the 2001 recession, then the mortgage crisis in 2007 and now we’re witnessing the COVID-19 recession, the worst global economic crisis since the Great Depression.

Is it then such a surprise people in their twenties can feel financially insecure? Such events don’t exactly inspire us to take on debt, thank you very much.

The truth is the fear of credit cards can keep you broke and stuck. They can be incredibly valuable to your financial health, and avoiding them can set you back in so many aspects. But jumping into credit cards outright when they make you anxious isn’t a good idea either.

First, we’re going to figure out exactly why credit cards scare you – and then we’ll work through each fear to help you live your best financial life.

See related: Best credit cards

Are credit cards bad?

Many people sincerely believe that credit cards are bad and a source of financial evil. They see cards as a way to get into dangerous debt, lose money to fees and interest, damage their credit or even have their identity stolen.

They’re not entirely wrong. A credit card is a tool, and like any tool, it can present a risk when misused. If you use a hammer in the wrong way, you can cause serious physical harm. If you’re careless with your credit cards, they can be detrimental to your financial well-being – and let’s be honest, your mental health too.

But if you use a hammer right, you can build something. And if you use a credit card right, it can be the best friend to your budget and your credit scores.

The fear of too much debt

This is a very rational fear. Credit card debt comes with some of the highest interest rates in the market, which makes it easy to lose control over. And if you only make minimum payments, a couple of thousand dollars on your credit card can become a burden you’ll carry for years.

It also doesn’t help that credit card debt can feel like something that just happens to you. A medical emergency? A car repair? These kinds of unexpected expenses often put people in debt because it’s so easy to reach for your credit card when you have no other means to fund an emergency.

Conquering the fear of credit card debt

First and foremost, understand that credit card debt won’t just happen to you if you don’t let it. You have control over it, not the other way around.

Unexpected expenses do happen, but to avoid being blindsided by them, make sure to start an emergency fund – money set aside to cover the cost of unexpected events, from home repairs to job loss. It’s obviously not fun to set up and will take some time and effort, but it will provide such a sense of financial security. Whatever happens, you’ll be prepared and won’t have to use plastic.

Many finance experts recommend having between three and six months worth of expenses in your emergency fund. It’s a lot, I know – but also completely doable. You can start with a more modest goal not to get overwhelmed, maybe $1,000 to get you going and in the saving mode. That’s how I started, and eight months later I reached the three months of expenses mark. Now I want to get it to six months, but at a slower pace so I can enjoy the money I’m making. And if I can do it – you can do it, too!

The fear of overspending

Oh, how easy it is to slip into overspending.

When I was 21 and just moved to the States, my bank offered me a credit card. It just kind of dropped it on me. Cool, I thought. It’s just so American. Everything was fine until the going got tough and I started actually using it. Sure, I used it to buy food and essentials, but I also used it to buy things that made me feel less broke – which I definitely was.

I swiped it when having a lunch out with a friend. I swiped it to buy concert tickets. I swiped it at Sephora.

Today, that card is a ghost on my credit report, a record of missed payments dragging my credit score down. All because I got reckless and spent more than I could afford on things I could live without. It was just too easy.

Don’t be like me.

Gaining control of your spending

If you’re afraid to fall victim to overspending, treat your credit card like a debit card. If you don’t have enough money right now – don’t spend it.

If the temptation is just too much, put one small automatic charge on your credit card, like your Spotify subscription. Then hide the card where you can’t easily reach for it – freeze it in an ice slab if you need to (yes, some people actually do that, I’m not kidding.). Only use it for that little charge to allow it to help build your credit until you’re ready to try and use it on purchases responsibly.

See related: Best credit cards for streaming services

If you’ve already been burned by your own spending patterns, as I have, it may be harder for you to give yourself another chance. Don’t rush it. Set limits for yourself and start slow. Pay off your credit card balance as soon as it’s posted without waiting for the end of the month. Get comfortable with using your credit card – your past mistakes will be a reminder not to go overboard.

The fear of fees and interest

Many people are also wary of the many credit card fees, as well as paying interest.

The fear of interest is clear. Credit card APRs are sky-high, comparing to those of other types of debt, and interest charges can add up to make some scary monthly bills.

Fees are terrifying because they seem to wait for you like a trap. Credit cards may charge multiple kinds of fees, and a glance at terms and conditions can make you gulp.

But you know what the good part is? You can avoid almost all of them.

Avoiding fees and interest charges

Avoiding interest is easy. You never have to pay it if you always pay off your credit card balance in full. Plus, that will help you with the two fears we’ve already discussed, as you won’t get into debt this way and will be less likely to overspend.

As for the fees, terms and conditions can be a dense, boring read. Instead, try browsing through credit card reviews where all details regarding cards are explained in a simple human language. Check some articles about the particular card you have or are looking into as well. Being aware of the fees is the first and most crucial step to avoiding them.

The fear of credit damage

It’s true, credit cards can damage your scores when misused. Maxed out your card? Your credit utilization ratio (how much of your available credit you’re using) will be through the roof, impacting your credit negatively. Missed a payment by more than 30 days? It will stay on your credit report for seven years, continuing to affect your credit score.

When there are seemingly so many things that can go wrong, it’s natural to be anxious. However, that’s also negative thinking.

On the positive side, a credit card is one of the best tools for building your credit. For instance, sure, I used a credit card to ruin my credit with missed payments and a charge-off. But then I used another one to rebuild it (kudos, Capital One Platinum Secured Credit Card, my credit savior!). Now my VantageScores in are in the 730s, and my FICO score, according to Experian, is only 5 points away from good. And my Capital One Platinum turned into the cash back earning Capital One Quicksilver Cash Rewards Credit Card. I think we can rightfully call this a credit glow up.

Making sure your credit card won’t hurt your credit

Your credit card can help you continuously improve your credit when you use it responsibly. How do you do that? Employ the tactics we’ve already discussed. Don’t run high balances, and if you can, pay off your credit card in full every month – your credit utilization will thank you, and so will your credit. This will also help you avoid missing payments and build a positive payment history (which is the best thing that can happen to your credit ever).

If you haven’t yet, educate yourself on how credit works, what can hurt it and what can improve your scores. This will give you the confidence and knowledge to make better decisions when it comes to your credit cards.

The fear of credit fraud

If you’re worried using your card puts you at risk of fraud, I commend you for being responsible and aware of such danger.

Indeed, things can go wrong. The statistics are sobering: Credit card identity theft has tripled since 2015. Fraudsters get more and more creative with their techniques. There are shopping card viruses, phishing, apps that steal your data, credit card skimming and don’t even start me on data breaches.

Do you know what’s scarier though? Fraudsters can get to your debit card too, and then they will have access to your bank account. The money in your checking account is very real. It’s yours, not your bank’s, and once it’s gone, it will be harder to get back.

Debit cards don’t have as strong fraud protection as credit cards – in addition to federal law requirements, many credit card issuers have voluntarily adopted zero liability policies. Unlike credit cards, you may be responsible for up to $500 of charges fraudsters made with a debit card, and some banks may even hold you 100% liable for certain types of fraudulent transactions.

Credit card issuers are much nicer and easier to deal with when it comes to fraud. Besides, if you’re careful with your credit card, you can reduce the risk of becoming a victim of fraud.

Protecting your credit card

Just like with anything, knowledge is power. You’ll feel safer using your credit card when you know that you take all possible measures to protect it.

Don’t give out your credit card number over the phone – or ever, without a very good reason. Avoid unsecured websites. Learn how to spot and avoid gas pump and ATM skimmers. Pay attention to your transactions before paying your monthly bill. Read on what you can do to keep your credit card safe and take that advice to heart.

Stay vigilant when using your credit card and don’t miss on all its benefits only because of a potential threat. Those fraudsters aren’t worth it.

Give credit cards a chance

Your credit card fears may be valid, but they shouldn’t keep you from reaping all the credit card benefits. A credit card can be amazing news for your credit and overall financial health if you use it carefully and responsibly.

I hope I’ve persuaded you, and if I have, get matched with your next perfect credit card using CardMatch™. Here’s to swiping right!

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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