The Times Herald (Norristown, PA)
Is it OK to never have a credit card?
Thanks to quick online applications and, in some cases, instant approval, credit cards make it as easy to build your credit history as it is to make purchases. But they can also make it easy to fall into debt if you struggle to pay on time or tend to spend more than you have.
As a result, some people regard credit cards with skepticism: 17% of U.S. adults don’t have one, according to a 2019
Federal Reserve report.
No financial product is onesize-fits-all, and it’s OK if credit cards aren’t for you. There are other ways to establish credit — and keep your credit scores high — that don’t involve a credit card.
Be diligent about loan payments
If you’re already making ontime payments on an installment loan, like a student loan, your efforts are making a difference. Loan payments are reported to credit bureaus, so over time, this can build your credit history.
“Student loans are often the easiest loans to qualify for, especially when you are very young,” says Adam Sanders, director of Successful Release, a Philadelphia-based organization focused on helping former offenders find financial and professional success after prison. He adds that “student loans are often the way that many adults begin building their credit.”
No student loan in your name? A credit-builder loan from a bank or credit union may be an option. With this loan, the lender deposits a preset amount into a savings account, and you make monthly payments until the deposit is repaid.
Pay other bills on time
Other bills that you pay on time each month — cable, water, power, etc. — don’t generally have a direct effect on your credit reports, but that doesn’t mean they’re not important to your overall financial health.
“You must maintain impeccable nontraditional credit,” says Roslyn Lash, an accredited financial counselor, author of