A credit score requires that you have at least one account that has been open and active for a minimum of six months to get one. If you've never had a credit card in your life, there's a good possibility you don't have a credit score. This is because credit cards are often how individuals begin to construct their credit histories.
To our relief, establishing or building a credit history does not require using credit cards in any capacity. Suppose you have ever taken out a loan of any kind, whether a school loan or a car loan; you most likely have a credit score. Individuals' creditworthiness and financial personalities may be deduced from their credit scores, which are based on a trust system that is legally recognized. It is required in any connection that includes financial obligations, such as payments, a rental agreement, or a mortgage.
Less Fraud Protection
Credit cards provide the highest level of protection against fraudulent transactions. If you report the problem within the allotted time, your responsibility for fraudulent credit card payments is often capped at $50. If you use a debit card and fail to report any suspicious activity within a certain time, you might be held responsible for fraudulent payments totaling up to $500. If you do not tell your bank within two business days, you may be subject to a fee of up to $50. Cash is much worse. If someone steals the cash from your wallet, you may never see any of it again.
It's Possible That Getting a Credit Card in the Future Will Be More Difficult
In most cases, to get authorized for a credit card, you will first need to have built a credit history. If you've never had a credit card before, it's possible that you don't have a credit history. This makes it far more difficult to acquire your first credit card in the future if you've never had one before. However, some good news: your chances of getting accepted for a credit card increase significantly if you have a history of successfully managing other forms of credit accounts and your source of income.
One option for someone looking to establish their credit history is to apply for a store credit card. They normally do not demand a good credit score from their applicants. Additionally, they could have a low limit. You may also start building your credit history by applying for a secured credit card. A secured credit card requires you to deposit with the credit card issuer, after which you will be given a credit limit normally equivalent to the amount of the deposit you made. For example, if you deposit $500, you earn a $500 credit line. If you are responsible for your payments, you may be eligible for a transition in the future to a credit card that does not need a security deposit. If this occurs, we will return the deposit that you made.
You are Not Taking Advantage of Many Wonderful Benefits That Come With Credit Cards
Many individuals refuse to use credit cards because of the risk of accruing debt, which may be avoided if you charge no more than you can pay in full every month and no more than you can comfortably afford. You cannot take advantage of the several perks of having a credit card if you do not have one. Depending on the credit card you decide to use, you may be eligible for various benefits such as protection against fraudulent charges, credit card rewards, roadside assistance, travel insurance, insurance for rental cars, extended warranties, and price protection.
Certain Transactions Will Require Extra Steps
When you have a credit card, it is much simpler to complete transactions such as renting a vehicle and making reservations at a hotel, for instance. In such a case, you may be requested to provide further evidence to establish your identity, or you may be required to pay a security deposit before the transaction can be finalized.
For instance, many hotels will put a hold on your debit card for an additional amount over the sum of your reservation to cover any incidentals that may occur during your stay. A debit card may perform the same functions as a credit card in many transactions. However, even these cards have significant limitations, such as weaker protection against fraud, fewer rewards, and a security deposit requirement for some purchases.
