If you do not have any existing credit, be it a credit card or a loan you will not get the best policies for an insurance or loan. An active credit account can boost your credit report and score and the lack of one can decrease your credit score. Not only do you need a good credit score for most mortgages and loans, you also need it to get a good deal on insurance. So if you don’t have a credit score, you will end up purchasing insurance at higher rates. And you know, that could mean a significant amount of money forked over unnecessarily.
So what should you do? Not having a credit card and paying for everything in cash means you are spending well within your means. But having a credit card does not mean you have to use it all up. You could get a credit card and use only a small percentage of your credit limit and then pay it in full every month. That is an amazing way to boost your credit score without having to pay for interest rates and the likes. Knowing how to use it is the key in using a credit card.