The days of living only with paying just cash are over. Credit cards help you build your credit, increase your borrowing power, and make major purchases. If your future goals include owning a home, buying a car, owning your own business, or traveling then unfortunately you must have a credit card.

How you handle your credit cards affects your borrowing power in the future. If you have several credit cards with high credit limits you will have more leverage in the future when it comes to achieving low interest rates and lower fees. Having a credit card is your chance to show lenders you are responsible.  A person who is responsible and has alternative means to repay loans is a low-risk applicant and has a much better chance of qualifying for a loan than someone with no history and no credit line.

Credit cards can also be used as an additional form of identification. They can be necessary when renting a car or staying in many hotels, and they are excellent alternatives to cash. If your credit card is lost or stolen, you can be reimbursed for any fraudulent charges made. If your cash is lost or stolen it is gone forever.

Your credit card history also affects your ability to get a credit card in the future.