Why Every 20-Something Should Have a Credit Card

July 17, 2023
Josh Viljoen
Josh Viljoen

A Beginner's Guide to Building Credit


If you're a 20-something, you might not be thinking about building credit just yet. After all, there are many misconceptions surrounding credit cards and credit scores. Some people believe that credit cards are dangerous or that they should be avoided altogether. Others think that having no credit is better than having bad credit. However, building credit is an important step toward financial independence, and having a credit card can help you get there. In this beginner's guide, we'll explain why every 20-something should have a credit card, dispel some common misconceptions, and provide tips for building credit responsibly.


What is Credit?


First, let's define credit. Credit is a type of loan that allows you to borrow money now and pay it back later. When you use credit, you're essentially using someone else's money to make a purchase. In return, you agree to pay back the money you borrowed, plus interest.


Why Do You Need Credit?


Credit is important for a variety of reasons. For example, when you apply for an apartment or a car loan, the landlord or lender will likely check your credit score. If you have a good credit score, you're more likely to be approved for the apartment or loan, and you may even qualify for a lower interest rate. Building good credit early can also help you in the future when you're looking to make larger purchases, such as a home.


Getting Started: Choosing the Right Credit Card


If you're interested in building credit, the first step is to choose a credit card that's right for you. There are a lot of credit cards out there, so it's important to do your research before making a decision. Some things to consider include:

  • Interest rates: Credit cards typically charge interest on the balance you carry from month to month. Look for a card with a low interest rate, especially if you plan to carry a balance.
  • Rewards programs: Many credit cards offer rewards programs that allow you to earn points or cash back on your purchases. Consider which rewards program would be most beneficial to you.
  • Fees: Some credit cards charge annual fees or other fees. Make sure you understand all the fees associated with the card before you apply.


Using Your Credit Card Responsibly


Once you've chosen a credit card, it's important to use it responsibly. Here are some tips for responsible credit card use:

  • Pay your bills on time: Late payments can negatively impact your credit score and result in fees.
  • Avoid maxing out your credit limit: Using too much of your available credit can also harm your credit score.
  • Keep your card active: Make small purchases on your card each month to keep it active.


Monitoring Your Credit Score in South Africa


Finally, it's important to monitor your credit score regularly. In South Africa, there are several sites and platforms that can help you do this. One popular option is My Credit Check, which allows you to check your credit score and receive alerts if there are any changes. Another option is ClearScore, which provides a free credit report and score every month. It's important to monitor your credit score regularly so that you can identify any errors or fraudulent activity and take action to correct it. By monitoring your credit score, you can also see how your credit-building efforts are paying off and make adjustments if necessary.




Building credit is an important step toward financial independence, and having a credit card can help you get there. By choosing the right card, using it responsibly, and monitoring your credit score, you can start building good credit in your 20s. So don't wait any longer - start building your credit today!



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