Establish or Build Your Credit
One final but very significant advantage of credit cards is that they're a great tool if you need to establish or build a good credit history. Credit cards typically report account activity to at least one of the three major national credit reporting companies (Equifax, Experian, and TransUnion) on a monthly basis. Their report of your responsible credit card use helps improve your credit rating, also known as your credit score.
The better your credit, the more likely it is that you'll get the most favorable terms (low interest rates, low fees, and so on) on all types of credit, including credit cards, car loans, and mortgages. That could easily translate into thousands of dollars in savings. Good credit can also lead to big savings on your insurance premiums year after year, and it can even help you land your dream job. (For more on credit reports and credit scoring, see Chapter 9, "Your Credit Report and Score: The Better You Look, the More You Profit.")