Why you should get a credit card

• With credit, as we’ve mentioned in other lessons, you need to build it to strengthen your credit score so lenders are willing to let you borrow money for your big life needs – from buying/leasing cars, to buying/leasing homes, and much more.
• A credit card is the simplest way to build credit. In many cases, you’re going to buy stuff anyway, so why not start doing it with a credit card? Many card options are free and made for the needs of all sorts of people with different financial situations, so there’s something out there for you.
• While the most important reason you need a credit card early on in life is to build credit, there are a lot of other great benefits to different types of credit cards, too. From earning rewards points and cashback, to free travel and exclusive experiences, there are all sorts of credit card offerings out there.
• It’s never too late to start building credit!

Debit card vs. credit card

Both a debit card and a credit card involve some plastic/metal card and an account number that you can use to buy the important things in life. But what’s the difference?

• With most debit cards, there are zero benefits – both in terms of building credit and for getting cashback/rewards.
• With a credit card, you’re borrowing money from a lender. “Buying on credit” means you’re borrowing, so you’re using someone else’s money to buy it. That also means you have to pay it back, but in the process, if you manage it properly, you’ll be building credit and/or earning rewards along the way.
• A debit card is different in that it’s simply transactional. Debit essentially means “subtraction” – the debit card is linked directly to your bank account and is subtracting money with each purchase. Whereas, with a credit card, the money isn’t subtracted until you pay your monthly bill.
• Sometimes you can get cashback and some other benefits from a debit card, but the long term benefits of credit cards are greater.

To summarize, credit and debit cards both have their advantages. But, we definitely recommend getting a credit card ASAP if you don’t have one. Start building that credit! You won’t regret it.

Source(s): CNBC