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Do You Need a Credit Card?

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If you don't already have one, you might wonder if you need a credit card. In most cases the answer is yes. If you live in any country with a well-developed economy, credit cards are more than just a convenience. For example, in the United States it is nearly impossible to do some things without them, like rent a car. We live a ways from the nearest airport, and without a card we would have to drive two hours round-trip just to buy plane tickets for any trip we planned.

You need a credit card if you want to travel easily in general. It is dangerous to carry large amounts of cash, and in some cases you will be unable to call ahead and make hotel reservations if you plan to pay by check. So for travel - and many other things - you need a credit card. A cash back credit card can be ideal if you're able to pay your balance off in full each month. But what if you have difficulty getting one, or what if you can't seem to stay out of trouble when you have credit cards?

First, if you have never had a card, or if you have ruined your credit and so can't get one for that reason, don't despair. There are a few things you can try. First, you can start to handle credit responsibly so you won't run into this problem in the future. That, of course, may not help you right now, so what can you do to get that card this week?

You can be put on someone else's card. If a spouse, family members or really good friends want to help you out, they can add you to a card that they rarely use, and allow you to use that account. This isn't as risky for them as it might seem. They can add you to a card that has a low limit. If the limit is $300, for example, that is about the most they can lose if you cannot or do not pay the balance due. Furthermore, as the primary person on the account, your friend will get the statements and so know if you are paying on time.

Now, if you are planning to actually run a balance, be sure to pay attention to the interest rate. Many cards have a variable rate, which is based on the prime rate plus a percentage (Prime plus 5%, for example). If you have a balance on an existing card, you might want to see if you can do a 0% balance transfer, which some companies offer for a specified time.

A second option is to open a checking account and get a Visa or MasterCard debit card to go with it. This is often easier than getting actual credit, since your card will be limited to the amount that you keep in your account. That's a great way to keep yourself out of trouble too. You can only spend everything you have, and as bad as that sounds, it's a lot better than spending more than you have.

If you need a credit card and there are no friends who are willing to add you to theirs and no banks willing to trust you with a checking or savings account debit card, there is another option. Get a parent or friend to open a bank account with your name on it and get a debit card for you as well. This is often possible even when you do not qualify on your own.

The point here is that you will be the one to fund the account, so your friend will have less risk. He or she can just forget about the account as long as the statements look okay when they come in the mail. Meanwhile, you will have to deposit money to cover the debits. A Visa or MasterCard debit card typically functions just like a credit card with one exception; it can be more difficult to get false charges refunded to you, so handle it with care.

You can also get a prepaid credit card at many stores (WalMart carries them at the moment). If you need a credit card for travel or for unexpected needs, this is the quickest way to get one. You pay cash and the card can be activated immediately. Keep in mind though, that if you plan to rent a car using one of these, you will need a hefty balance on the card. Rental companies will need to charge you the full amount plus put a hold on $100 to $500 for any damage or extra charges that you may have to pay for.


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