If you have, there may have been several different outcomes. One possibility was that you were very responsible. You used the card for all of your expenses so that you could get the rewards your card offered. You never bought anything you didn’t really need because you knew whether you could afford it or not. Every month you get a bill and you pay it in full. You reap the benefits of your reward program month in and month out because by paying off your balance, you owe no interest. You’ve built your credit history up to an exceptional rating of ‘excellent’ and feel confident that you could get a loan whenever you need it.
Another possible response has a very different outcome. You too use your credit card for everything because you want the cash back or rewards points. One huge difference is that you use your card for everything including things you don’t need which often are things you can’t afford. Whatever you see that you want, you buy. You charge to your card left and right just thinking about all the rewards you will get. Come bill time, you realize you don’t have nearly enough to pay your bill and end up just paying the minimum. The money you don’t pay then begins to collect interest and the amount you owe grows faster than you can handle. Your debt skyrockets and your credit score drops fast. You’ve gotten yourself into a huge mess.
If you are the first person, I would like to congratulate you. You know how to use credit cards to get the most benefit for you. If you are the latter person, you do need some help. Until you get your credit history up, you really can’t have a card. This can cause a lot of problems for some people. It will probably keep you from ever buying things on the internet because you don’t have a credit card, and it forces you to carry cash all the time, even in large amounts, which isn’t always safe.
If this is you, there is a solution. You can get a prepaid card. With a prepaid card, you can still purchase over the internet and use it just like a credit card at shopping malls and restaurants. Instead of giving you credit to spend, you load your own money on the card. This way you can never spend more money than you have. If you have $100 on your card and go to spend $200, the transaction will not go through. Also, anyone can get a prepaid card. You don’t have to worry about applying and getting denied because of bad credit.
In order to fix your credit and get rid of debt, you need to learn how to manage your money. A prepaid card can help. It will keep you from spending too much and help you keep track of what you are spending your money on. You may find that a credit card isn’t even necessary in your life and a prepaid card can fill the void a lack of credit card leaves.