I have read a lot of articles lately on how people have to get rid of credit cards because they are the cause of so much financial ruin. I agree that credit card debt is a main cause for financial disaster for many families. However, we still need to have credit card debt.
For one thing if you want to travel usually you need to have a credit card just to reserve a hotel room or car rental. Now this could be a debit card tied to Visa or MasterCard, but you still need to have some type of credit card.
When I worked as a loan officer we usually liked to see on open credit card and one open installment loan. If someone applied for a loan without any open credit card or loan they were currently paying on they may not receive the best rate. Lack of credit history can really hurt someone when they are making a major purchase such as a home or car.
As I stated in previous postings about the importance of reviewing your credit report before making any major purchase. Usually you should obtain a credit report at least two or three months prior to purchase.
Credit cards can also help give us a buffer for unexpected car or home repairs. Most people do not have an extra $1000 or $2000 for a car or home repair. If you do not have any credit this can make getting approved for a loan when you need the money.
It is always good to have at least one or two credit cards available for emergencies. So if you are totally against credit cards you still need to have one for unexpected expenses.
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