You don't need a lot of credit cards, but having one or two credit cards is a good idea.
When you make a small monthly purchase on your credit card, and pay the balance in full, it will help to build your credit history and credit scores over time. Credit and debt are two different things and having a credit card doesn't mean you have to carry debt. You can pay the entire balance in full each month and have your credit work for you and available when you need it.
Credit cards carry a bit more weight when determining your credit scores because you decide how much to charge and repay every month. With installment loans, you borrow a fixed sum of money and agree to make monthly payments of a set dollar amount until the loan is paid off.
Because you can carry a balance from one month to the next, you have more "free will" to decide how you will manage them. You can choose whether to keep your balances low or max out your cards. You can decide to pay the balance in full each month or only make the minimum payment. Because credit cards allow you to make these financial decisions independently each month, they may carry more weight in your credit score calculations.
Using a credit card responsibly is one of the best ways to build a strong credit history. Having good credit will help you qualify for the most favorable rates and terms when applying for car loans, mortgages, and even insurance, which can save you money in the long run. A positive credit history can also help you get approved for renting an apartment or avoid having to pay a hefty deposit for utilities.
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Scoped on: 7/05/2018