Why I Have Steered Clear Of Credit Cards, Until Now

As a kid, my parents taught me a fundamental lesson: Don’t spend money you don’t have. Because of that, I have always steered clear of credit cards.

But I plan to attend graduate school, and I will need to take out student loans. Eventually, I’ll want to buy my first house, and that will require a mortgage loan. For these, I will be turning to my primary financial institution. And to qualify, I will need a good credit history.

That's why this summer, I opened my own credit card.

I started online by comparing different financial institutions and reward programs, looking for the best benefits for me. I consulted with my parents, who suggested I speak with our family financial advisor to find a card that would fit my needs now as well as five years down the line. I chose a travel rewards card. The application process was short and required only a few forms.

I go to school in Washington, DC, but Seattle is home. A round trip flight ranges from $600 to $1,200, so earning miles on my everyday purchases benefits me. Approximately a week after applying, I found out I qualified for the travel rewards card. A few weeks after that, I received my card in the mail.

I activated my credit card at the end of May but didn't make my first purchase until the beginning of August. Why did I wait more than two months? Because I was afraid I would start to use my card beyond my means.

I was approved for a much higher limit than I had expected. The maximum limit was substantially higher than my average monthly income from my part-time internship. And even though I've known about the importance of fiscal responsibility from an early age, I know numerous horror stories of people not being able to pay off their credit cards and spiraling into debt.

When I went to college, my parents gave me a family credit card in my own name for emergencies. I may have used it for other, more fun, reasons, as well. But I was not the one paying the bill. Now that I am, I’m more mindful about the charges I put on it.

I’m budgeting between fun and necessities, and the latter is my main priority. I also try to be diligent about paying off my credit card balance. Currently, I pay as I go through my credit card’s mobile app by transferring money from my checking account after each purchase. I do this for two reasons:

1. I do not have to wait and potentially forget to pay it off each month.
2. I want to remain conscious about how much I spend by seeing money go straight from my checking account and reducing my balance.

My biggest fear is spending more than I earn. When I use my debit card, I know I can only spend what I currently have in my account. But a credit card gives me the ability to go far beyond my monthly income.