By now, it’s no secret that millennials don’t like to use credit cards. Some studies have even shown that seven out of 10 millennials prefer to use a debit card, rather than a credit card, for their purchases. But are they right to fear credit? The short answer is: no. A credit card may come with all the disadvantages of a loan, but, if you use it responsibly, there’s no reason to fear it. And it can also come with benefits that debit cards don’t have.
There are three big reasons why a credit card can be your friend.
1. It offers better protection from fraud
Debit cards and credit cards may look the same, but they’re not. And if someone hacks or steals your plastic, you will be a lot happier if that plastic turns out to be a credit card.
The maximum liability you could face if your credit card is hacked is $50. That amount can climb as high as $500 for a debit card. Also, if you report the fraudulent charge on your credit card, the amount will be refunded almost immediately. For a debit card, you’d have to wait a good couple of weeks. That’s a lot of time if you have pay bills.
2. It can help build credit history
Credit cards help build credit history and debit cards don’t. That’s how things work, unfortunately. And credit history is important, especially when you want to make larger purchases, such as buying a home. It determines how much interest you ar going to pay when you borrow money. The age of your accounts helps when it comes to having a good credit history. So, the longer you wait to use a credit card, the harder it will be for you to build a good credit history.
Rewards are why many people get credit cards in the first place. By selecting the right credit card and using it responsibly, you can get discounts, free airplane tickets or other travel rewards. Of course, you have to be careful not to overspend, as this will have a negative impact on your credit history. But, if you’re smart, you can enjoy your credit card with no worries whatsoever.