Many Michigan residents have to face the challenges of living without at least one credit card. Moments between paydays and unexpected expenses like car repairs practically demand an additional income resource. It’s worth noting that the average American has a minimum of four credit cards with outstanding balances on each one of them.
What’s also noteworthy is that many believe that to establish good credit, they must have credit card debt. Establishing a solid credit history can be accomplished without the heavy burden of credit card debt.
Other credit-building options include rental, utility and starter loan accounts. Establishing a credit history with bills you already pay is a great way to build your credit. Although it has advantages and disadvantages, credit card debt is manageable.
Types of credit cards
Credit cards can fall under different categories such as rewards, starter, cash back, travel rewards and a few more. Business credit cards also offer similar reward programs.
It’s wise to keep business transactions separate from personal ones, and it’s wise to evaluate if both credit card types are needed. For example, a business credit card with a rewards program might be better than two travel credit cards to earn rewards if you travel for business. Placing money in a savings account is an excellent option for personal travel time.
Managing credit cards gets challenging because some sales and marketing tools are savvy enough to convince you to apply for multiple credit card types. Taking on too much debt is a huge financial burden.
Establishing credit with installment loans
Student loans are usually the first debt that many people get. Auto loans, personal loans and mortgages are other types of credit builders. Making loan payments on time boosts credit scores. Building strong credit habits offer more significant benefits and fewer burdens.