In a world that runs off of credit debt, a lot of people will tell you to just ditch your credit card and use cash only, possibly because of bad experiences they may have had when using one. People will tell you that credit cards are bad news and you don’t need one. That statement is true, but with some limitations. 

If you find yourself with a past due credit card and there’s no way of getting back on top, pay it off and ditch it. Don’t close it. Just ditch it; put it in a drawer and don’t worry about it for a little while. The truth is there really are no advantages to ditching your credit card. People assume that just getting rid of their credit card will make all of their bad credit problems go away, when it really is just how you use it.

Why is that? Well credit is something everybody needs to do anything in this world that we live in. You don’t have credit, you can’t get a house, car, apartment, you name it. It’s a good general rule to always have at least one credit card open, regardless of if you’re using it consistently.

I work for a credit card company, and I’m so glad that I do, because I get to experience all the do’s and don’ts in the credit world first hand. I’m only 19 years old, have three open credit cards and a credit score extremely close to the “Excellent” bracket. The majority of people are scared to have a credit card, because they assume they will go into credit card debt and never be able to dig their way out.  While this is partly true for some people because they have bad spending habits, most people would be able to manage a credit card very efficiently.  

One trick I use is don’t put anything on your credit card that you can’t pay cash for up front, ‘unless it’s an emergency’. That’s the problem most people (especially my age) have. They get approved for a credit card then say oh I have free money! No. That’s not how it works. I work specifically in collections and I’ve had so many phone calls with people that say “oh, I have to make payments on that?” Really? Yes you have to make payments on that, and you don’t need to have a credit card until you understand what a credit card is. 

Then once said customer goes past the 30 day of delinquency mark, that mark stays on your credit report for up to seven years. ‘Seven years’. All because you bought something you couldn’t pay for. The majority of credit card companies report to the three major credit bureaus every 30 days, and it generally takes 180 days to charge off a credit card, so if you choose to just not pay your card then you potentially have six derogatory marks on your credit report now. All staying there for up to seven years. 

Now with all the bad news of a late credit card out of the way, there are plenty of ways to build your credit back up if this was you in the past. First off don’t get rid of your credit card; especially if it’s your oldest card. Credit bureaus at a lot of factors when giving you a credit score, one of the major components is length of credit history. Don’t cut up that oldest card, just use it for small purchases like a pizza or groceries every now and then, and then pay it all off either as soon as it posts or whenever you get your bill. All the companies and bureaus care about is that you’re using your card and paying it. As long as you report as Good Standing on your report then it can be a 10 dollar charge or a 10,000 dollar charge, but just pay it off before that due date. 

I mainly use my cards for things I know I have to buy: groceries, gas, utilities.  These things are already worked into my budget and I know I have to pay them each month, so I use my cards, check my accounts every day until they post, then pay them off as soon as I can. Then these companies pay me for using the card in rewards points. I redeem these reward points for things I want.

It’s very easy and you can really make a lot of money through this, especially when companies run special offers like five percent cash back on gas. I’ve made a killing on the cash back from my It Card just from that. Now with all this being said, there’s really no “dream card” for one to apply for. Every card will build your credit back up, as long as it’s used properly. So go get that card out of the drawer that you have paid off, start using it for something cheap that you can pay off, get your reward points each month, and redeem for things you want.