If you’re a habitual debit card user but you’re interested in taking advantage of the benefits of a credit card, you might be a bit stumped. You could even be apprehensive. After all, credit card debt is scary, right? Here are the facts you need to know—and some tips to help you make the switch.
Big Responsibility
First things first, let’s address any fears you might have regarding accessing an open line of credit. Yes, you are completely capable of running up a huge credit card bill, neglecting to pay it back, and finding yourself in a massive amount of debt. And, no, that’s not a good thing. But consider things in a different light for a moment.
You Can Handle it
You’re an adult! You handle big responsibilities all the time. If you drive a car, you’re responsible enough to not harm anyone with it despite the inherent dangers of using it. Do you ever turn the stove on without burning your house down? How about using kitchen utensils without injuring yourself? See? You’ve got this!
Just Be Mindful
The most important thing about owning a credit card is that you just need to be mindful regarding your spending. Don’t spend more money than you have and you’ll be okay! That’s exactly the way you’re already using your debit card. Just apply that same principle to your credit card and don’t view it as an “unlimited money” card and you’ll be fine.
Why to Have a Credit Card
A credit card gives you some significant advantages over a debit card. The first one is obvious. You can spend more money than you currently have if you’ve got a credit card. “But wait!” you say, “you just told me to not do that!” That’s right, I did. But hear me out: having an emergency backup line of credit is extremely useful.
When to Spend Beyond Your Current Finances
That doesn’t mean you should max out your card buying new video games and cool shoes, though. Only spend beyond your current finances if it’s an emergency, such as a flat tire or a sudden appliance repair you couldn’t otherwise afford. Once you get paid, just pay off your credit card bill and you won’t accrue a ton of interest.
Reward Cards
Even if you’re not looking to tap into your credit, you can still use a credit card for a powerful bonus: rewards. Many card issuers offer rewards cards that give you points you can exchange for various benefits. Some cards can award you free airfare, while others get you discounts on hotels. A popular form of these cards is the ever-present cashback card, which just issues you a portion of your spending back as long as you meet certain criteria.
Building Credit
One of the main reasons to have a credit card is to help build your credit. As long as you keep making on-time payments and use the card consistently, you’ll get a pretty substantial boost to your credit score. Credit reporting bureaus really like it when people can responsibly manage a credit card!
Just the Basics
The best way to transition into using a credit card after using a debit card is to keep the card for just a few basic, recurring costs. This could be things like utilities, groceries, or other recurring expenses that you can plan around. Just pay the card back every month and watch your credit score reap the benefits!
Make a Budget
If you’re feeling particularly responsible, you could even make a budget and use your credit card for all of your expenses. Just make sure that your card’s limit can accommodate such a balance, and see to it that your income meets these expenses and can pay off your balance every month. If you can manage this, you could reap some serious rewards.
Read More: How Prepaid Credit Cards Protect Your Identity
Flexibility and Rewards
Using a credit card to cover all of your expenses might sound a bit scary if you’re used to just using a debit card, but it could help you build a phenomenal credit score and stack up plenty of rewards points at the same time. If you’ve got the self-control and budgeting talent to pull it off, you could stand to benefit from such a financial lifestyle considerably.
Read More: The Top Reasons You Should Have a Credit Card
