If used correctly, credit cards can be great. If not, they can be one of the most damaging personal finance tools around.
This is where it’s important to understand the American credit system. In order to build credit, you need to have and use it responsibly. This is important if you plan to buy a house or take out a loan.
Unfortunately, this gets a lot of people into trouble. When you make purchases on credit, you agree to pay that money back later — and it can be really easy not to, especially if you’re young or inexperienced. You are charged interest on the remaining balance when you don’t pay your balance in full. Plus, the less available credit you have, the worse it looks for your credit history.