Financial literacy is not common among the vast majority of the world.

With money being one of the very few and powerful global languages, it is important for each person to know how to speak that language.

Sadly, this is something many of us become familiar with after leaving school and facing the real world. Young people especially stand at a great disadvantage, as being ignorant to information allows them to make simple avoidable mistakes, but it is never too late to learn something new.

Did you know that your credit score is an important part of your financial health?

In Jamaica, increasing your credit score is not as encouraged as much as it is in the US. While debit cards have their advantages, it’s just as good for us to utilise credit cards.

For young people especially, now is the time to build your credit score as there are many benefits that come with having a positive credit score and having the reputation of having a positive credit score.

Let us explore a few reasons it may be a good move for young people to use credit cards here in Jamaica.

You Don’t Build Credit with Debit

A debit card takes money directly from your checking or savings account whenever it is used, thus, nothing about the transaction made is sent to credit bureaus.

Fayola Evans-Roberts, of the Office of the Supervisor of Insolvency (OSI), says that “a good credit score enables you to access credit from individuals and institutions. Access to more credit is important, as it shows that more persons can trust your ability to repay your debt, because you are a person who manages his or her debt in a capable way”. So, the next time you are about to make a purchase, instead of using your ‘go to’ debit card, try using your credit card to increase your credit score instead.

Credit cards offer different fraud protection

Credit cards offer much better protection from fraud. If fraudulent activity is done on a debit card, the process to retrieve the cash may be very lengthy and in some instances the money may not be returned to you. With a debit card, you will be held liable for the unauthorised purchase while the opposite stands with a credit card.

A more digitised environment

The world is becoming an even more modernised and digital space. It has often been said that we have the potential to become a ‘cashless’ society. Evans-Roberts shared that, “we have been hearing the term ‘cashless society’, so access to credit to ensure that certain resources are available to you is crucial”.

More Rewards

Although there are debit cards that offer rewards, they pale in comparison to the rewards offered by credit cards. Sagicor, for example, offers the Cross Border Bonus, Pay With Rewards, eGift Cards and Redeem Travels. The National Commercial Bank offers points for flights on any airline, points for hotel stays in Jamaica or anywhere in the world, and points for car rentals. Other banks on the island offer similar rewards with the use of credit cards as well.