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The Need for Credit / By: Aniyah Fisher

When thinking of money, credit is something that easily comes to mind. According to the NY Federal Reserve, there are “459,000,000 credit cards currently in circulation” (Experian, n.d.), indicating that credit is widely used. However, it may be challenging to define credit and highlight its importance. Establishing and maintaining credit is essential to creating good money habits and financial freedoms. Credit is important for major purchases, it is convenient, and having good credit can be rewarding.

Americans may find it harder to make major purchases without credit and credit history. Major purchases, that involve a home or car loan, require an analysis of “your credit history—your record of borrowing and repaying funds—as a first step in determining” your eligibility (Akin, 2019). Whitney Morris, a 19 year old Quantitative Services Analysis for Bank of America, shares that she started building credit in 2018 as an “authorized user* on her mother’s account.” With the intent to soon get her own apartment and second car, she says her occupation and salary increase has motivated her to increase her credit usage, which will help her reach these goals.

Another advantage of having credit is its convenience. According to a survey conducted by Experian, 42% of participants enjoy credit as a form of emergency savings, and 36% use it as an alternative to carrying cash (Experian, n.d.). Brittni Adams, who started establishing credit with “Capital One through a Secured Card,” agrees that credit is convenient with “easy access to cash” and even acknowledges that securing rentals on vacations requires credit. A Secured Card, which requires you to put money down to build your line of credit, may be a more suitable option for someone who is unable to receive a traditional, credit card.

There are many perks to having good credit. A higher credit score can get you lower interest rates on loans, lower down payments, and more lines of credit. Many creditors offer rewards and cash back when you use their card, which helps you save money. 64% of Americans believe there is a perfect card for them (Experian, n.d.); and while finding the right card for you may be challenging, the benefits are well worth it.

Learn more about building credit! Visit! Complete the Credit Ready playlist.

*Note: Becoming an authorized user should be considered VERY carefully as each person’s financial behavior can impact the other individual’s credit to some extent.


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