Living with credit

Emily’s list: No credit edition

Emily Crone

It’s no secret that having bad or poor credit makes it more difficult to be approved for credit cards, mortgages and even cellphone plans. Having bad credit can also result in higher APRs and fees on loans and insurance. But what about people who have no credit?

Many college students have no credit to their name, which is why student credit cards are so useful. Student credit cards are like regular cards in miniature. They usually have a much lower credit limit and fewer benefits, in order to help a young person become familiar with credit at a lower risk than a regular card. Some students, or even adults with bad credit, may need to use a different new-credit product — a secured credit card — before they can qualify for a regular credit card. Secured credit cards have low credit limits and require you to put money down first to show you’re good for it. No credit edition

I recently learned of a situation that made me question the logic of no credit being treated the same way as bad credit. An older adult I met has zero debt and has been incredibly financially responsible. His house is paid off, his car is paid off and he has no student loans. He rarely uses credit cards because he doesn’t need to. He recently decided to apply for a credit card for some perks, and he was denied due to a lack of credit. He was shocked that someone with a demonstrated history of making thrifty, conservative financial choices would be turned down.

He had to apply for a more basic card and needs to start using it on occasion to build a good credit history before he can qualify for a card with rewards or a better APR. Moral of the story? Even if you don’t need a credit card, it’s smart to have one and use it from time to time to keep your good credit going. One idea is to just put one tank of gas a month on the card and pay it off as soon as you can, or to use it for groceries (and some rewards credit cards offer cash back for purchases in those categories). It can be difficult to book some hotel rooms and rental cars without a credit card, so you have nothing to lose by having one in your wallet and using it wisely.

Have you ever experienced discrimination for having no credit? For more tips and stories about credit and money, read on for my roundup of my favorite personal finance blog posts from the past week.

1. The Digerati Life presents a great post about the many benefits of credit cards.

2. Club Thrifty shares what it’s like combining finances as a married couple from the perspective of the wife.

3. Money $mart Guides questions whether no-spend challenges are a wise financial decision.

4. Per$onal Finance Journey discusses why having personal debt isn’t always a bad thing.

5. Work Save Live lists 10 important reasons why you must have an emergency fund.

6. Steadfast Finances shares five tips and tricks you can use to maintain your car and save money in the long-term.

7. Money Under 30 discusses how he tackled his debt and managed to pay off $80,000 in three years.

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