I'm an American and I don't understand it. What happens if you don't have credit? I only have a Debit Card.
You don't get larger loans and if you do, you get horrible APRs. When I was renting an apartment, I had my credit checked. When I bought my house, I had my credit checked. Car? Credit checked. Unless you're making a -ton- of money and have a -ton- of liquid assets and can walk in with a suitcase with $30k in it, you'll have a difficult time buying any big money items without the seller trying to screw you over.
With an 800+ credit score, the bank gave me a sub 3% APR, waived a bunch of fees when setting up my mortgage and other credits which pretty much covered my closing costs, a higher interest rate on my savings and checking account. I bought a new washer and dryer at 30 months 0%apr. $2400 over a 12 month period time is easier to swallow than writing a check for $2400.
Having a credit card's not bad. Instead of putting your bank account on the line when making online purchases, you put your credit on the line. If your credit card number gets stolen, the funds that are being held isn't actually your money. You're not liable for it. Whereas your debit card? Some banks are real dicks about overdraft fees. With online credit card payments, it's easy to check your balance and pay it off. Just buy your gas on it and you'll be in much better shape than someone who buys their gas on a debit card.
Get a card with rewards and you're getting free money. Renting a place? See if you can put your rent on a credit card. Pay that off. Take an all expense paid trip using your credit card points where you can enjoy the luxury of the Motel 6 while you visit wonderful Indiana! (Find a credit card that has -good- rewards, or you'll get to chose between a trip to Indiana or a Star Wars episode 1 bobble head.)
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