Whether you are 18 and just beginning to hear about credit cards or 45 and have never thought about the benefits of cards, it’s important to start establishing credit.

                By                    Maddie Duley

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Credit cards come with many benefits. They allow cardholders to take control of their finances and learn valuable money-handling skills. They also offer fraud protection and monetary benefits to users and allow them to repair or build up their credit scores for future purchases.

Here is more on that study and reasons it’s important to open a credit card as early as you can.

16% of Americans Do Not Own Credit Cards

Of those who do not have credit cards, the majority are ages 45 to 54 — 22% of respondents fall into this category. Additionally, 19% of Americans ages 25 to 34 are also more likely to not be responsible for any credit card bills. Furthermore, women (18%) are more likely than men (11%) to not own credit cards.

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Additionally, of the Americans who do have credit cards, many have more than one. While the largest proportion of Americans have one credit card, with 28% of respondents falling into this category, the survey revealed that 25% of Americans have two credit cards, 15% have three, 8% have four and 9% have more than four.

Now that we’ve gained more insight into the number of Americans who have credit cards versus those who do not, let’s take a look at some of the reasons to consider opening a card.

Education: A Credit Card Can Help Teach Debt Management

Opening a credit card does not only allow for rewards and perks, it also enables the user to learn valuable life skills and teaches the person how to stay on top of finances.

“If you avoid credit entirely, then you may make more significant mistakes when you are forced to start later due to a cash flow crunch,” said Nicole Strbich, CFP and director of financial planning at Buckingham Advisors. “To avoid this, start with small credit limits and only charge certain expenses, like gas or recurring monthly bills.”

Positive Credit History: It’s Important To Build Credit History

Consider opening a credit card in order to build credit for future investments. The minimum age to open a credit card differs; but, in general, most cardholders must be 18 or 21 in order to open an account. While younger Americans might not be thinking about buying a home or a new car, it’s important to get a head start on your financial journey in order to be prepared for these expenses later.

“Without a credit card or other loans, it can be impossible to build a credit history to be eligible to buy a house or a car,” Strbich said. “Unfortunately, this history needs to be started multiple years in advance of the time that you may want to try to qualify for a loan; and, if you don’t get ahead of this, you may not have many options.”

According to our survey, the majority of Americans are opening credit cards in order to build credit — 22% of the survey respondents are using them primarily for this reason.

Perks: Credit Cards Provide Rewards to Users

Don’t forget that opening a credit card isn’t just opening a new bank account — it allows you to accumulate perks and benefits you won’t be able to take advantage of by using a debit card.

“Select a credit card that provides rewards that make sense for your expenses and lifestyle,” Strbich said. “Using a credit card for purchases and paying it off each month can generate rewards that can be used against your balance or sent to your bank account.”

Credit Cards Offer Protection Against Fraud

Protect yourself from credit card fraud and ensure you will be able to receive your money back by opening one of these cards.

“If someone steals your card information and makes fraudulent transactions, then you can report it to your credit card company and they will credit your statement for the transaction,” Strbich said. “And, in many cases, the credit card may alert you to suspicious activity prior to approving the transaction.

“With a debit card, you have less protection against fraud and less time to report the activity to limit your potential liability. I suggest clients avoid debit cards for this reason.”

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