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“But it’s dangerous to assume that all plastic is treated the same way by credit reporting and scoring agencies,” says credit expert John Ulzheimer, who spent years at FICO and Equifax.
“Only credit cards make it onto your credit report, so if you avoid them you’re really not doing anything to help your credit score or establish your credit report.” Even if you don’t plan to apply for a car loan or mortgage anytime soon, when you are ready to apply, those lenders will factor the age of your credit report into their decision.
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But to get smart about the plastic in your wallet, you have to shake free from common myths that can actually tank your score or cost you unnecessary money.
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The perks of debit are clear: It’s harder to overspend than if you use a credit card, and you can’t work yourself into a mountain of debt.
That debt aversion might explain why those of us who got our financial footing during the Great Recession are more leery of credit than other generations: According to a Bankrate survey, two-thirds of people ages 18 to 29 don’t have a credit card, compared with only one-third of people over 30.