You may know this, or know it but haven’t thought about it lately — either way, it’s a factoid that bears repeating. You can build your credit history without a credit card.
One of the lousy things about having bad credit, especially if you no longer have credit cards, is being constantly told and reminded that you need a credit card in order to repair and rebuild your decimated credit score. And so often people in the aftermath of a bankruptcy, for instance, are urged to apply for a secured credit card. I know that in my case, about a year ago, I had a discussion with my bank manager about a secured credit card (as I’ve made clear — I’m still picking up the pieces of a bruised and battered credit history), and that was the rationale she kept making — paying off any debt I incurred on the secured credit would help rebuild my credit.
This is true, of course, but if you have student loans, if you have a car loan, if you have a mortgage — and you’re making your payments on time — those are three ways that you can reclaim your good credit score without taking on another credit card.
I’m in no way anti-credit card. I think they can be terrific financial tools, and if you’ve had bad credit but now are financially secure and feel like you’d like one, that’s your right. And if you can leverage the credit card for reward points and come out ahead, all the better. But I am very against the idea that someone, having been clobbered by high interest rates, should feel any pressure to immediately jump right back in and sign up for a credit card. Especially if people believe they should get a credit card, to help their credit score.
[...] lousy credit is a hot topic with consumers these days, and one I’ve thought about a lot, having recently written a book about bad credit and having survived many, many years of financial [...]