Don't let fear derail your credit journey.
For many folks, that first credit card is a rite of passage that coincides with becoming a legal adult. And this is certainly a good strategy in many cases -- a long credit history can do wonders for your credit scores later.
Much to my current regret (and the shock of many who know my occupation) I did not do this. It took me another decade past reaching legal age to get my first credit card. A wait that now stymies my quest for a perfect credit score.
Given how often I extol the virtues of my favorite plastic payment method, why did I wait so long to get my first credit card? More or less the same reasons we avoid many things in life: ignorance and fear.
I had FoCD: Fear of Card Debt
Although it's super easy to find grand success stories from the rewards credit card high-rollers, it's as easy to find horror stories of credit card nightmares. Worse, those nightmare tales often include tens of thousands in credit card debt, tangles with collections agencies, and even bankruptcies.
In my case, I had a credit card horror story in the family. While it thankfully didn't hit the bankruptcy stage, my relative collected a significant amount of debt. As you'd expect, this meant many family gatherings included gossip and "advice" about the dangers of using credit cards.
Of course, I can't lay all the blame for my credit card hesitance at the feet of my irresponsible relative. A good portion of my debt intolerance also came courtesy of the Great Recession of 2008.
Just when I should have been deciding which student credit card was best for buying late night pizzas and beer, the economy was suffering from a systemic debt problem. Since I was already wary of the pitfalls of debt, watching thousands of people break under the weight of their financial problems cemented my decision to stay as far away from credit products as I could.
One thing led to another, and I was well into my 20s before I even thought about my finances beyond rent and bar money -- and nearly 30 before I considered the potential utility of credit.
With age came wisdom (and many rewards)
Once I set out to learn about building up my credit, my mind was blown by how much I didn't know. The idea that responsible credit card use meant not paying a dime in interest fees was a revelation. And the concept of earning credit card rewards was a total deal-changer.
My utter lack of a credit history meant I had to start from scratch when I got on the credit card bandwagon. My research showed that secured credit cards were my best option, so I headed to my bank and signed up.
After about seven months with my secured card, I qualified for my first unsecured rewards credit card. A few months later, I got another. Fast forward five years, and I have a dozen credit cards -- and zero credit card debt.
All's well that ends well
I often regret how long I waited to start building credit. I have a great score now, but my credit history isn't nearly as long as it could be. That means I'm stuck with a credit score that simply won't budge until my accounts age over the next few years. For someone who wants that coveted perfect score, this is a serious bummer.
At the same time, it may have been for the best. I wasn't exactly the picture of responsibility in my early 20s, and because my credit education was mostly nonexistent, chances are good I would have made some serious mistakes. I could very well have ended up in the same situation as my foolhardy family member.
So, what's the moral of this story? For one thing, always educate yourself. If I had researched how credit cards really work, things might have been different. But also remember that it's never too late to start building credit. Every credit journey is unique to the one taking it, so blaze your own trail, no matter where -- or when -- you start.
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