Want to Buy a House One Day? Get a Credit Card

People tell horror stories about credit cards: thousands of dollars in debt, double digit APR, and bankruptcy. But a credit card (if you use it responsibly) can actually be great for your financial health when it comes to your credit score. 

A good credit score can make a huge difference when it comes to getting a mortgage. If your credit score is poor (or not existent) you might get turned down by some lenders--or end up paying a lot more for your mortgage than you would if you had a good or excellent score. 

Use it responsibly 

The best way to build good credit with a credit card is to pay it off--on time--every month. And if you do that, you won't have to worry about interest. Try putting just your regular monthly expenses, like gas and groceries, on the card. Most credit card companies offer a budget tool to help you track your spending versus your budget. And if yours doesn't, there are a lot of great, free apps like Mint and Level Money that can help you manage your spending. You can even set up alerts for different categories (like restaurants, clothes, or groceries) to warn you if you're getting close to going over budget. 

Monitor your credit

If you're going to have a credit card (and even if you're not) it's important to keep track of your credit score. Start by claiming your free (yes, free!) credit report from each of the three major credit reporting agencies. It's an easy way to see what accounts are open in your name, if they're in good standing, and--of course--what your credit score is.  

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If credit cards aren't for you...

Is not having a credit card a personal preference or do they turn you into a spending machine? Answer honestly. Self awareness is a good thing. And if having a credit card makes you feel like you have unlimited money, it's probably better just to stick to cash. Don't worry though, there are still other ways to build your credit.