I opened my first credit card in my 20s, but here's why I wish I had taken the leap sooner

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As a summer intern at CNBC Select, I've learned a lot about credit cards in my first month.

I've researched credit cards, written about credit cards and attended meetings about credit cards, all the while learning about the well-balanced rewards programs and the ins and outs of welcome bonuses and enhanced purchasing power that many cards offer. Each day, I can't help but ask myself: Why didn't I get a credit card sooner? 

I've been a debit card loyalist ever since I opened my first one at age 15 (with the help of my parents). At the time I needed a checking account to deposit the earnings from my first job: lifeguarding for minimum wage about 20 hours per week over the summer. But now I'm 20 years old and as my financial responsibilities seem to multiply with every year, I realize my tried-and-true debit card isn't going to cut it any longer.

So this summer, I applied for and got approved for my first credit card. According to research done by The Motley Fool, 54.3% of people open their credit card between the ages of 18 and 20, and 30% open their first card between 21 and 24. Even though my timing is pretty average, here's why I wish I had opened my first credit card earlier.

Building credit

One of the benefits of having a credit card is that using it responsibly helps build my credit score and history. Credit card issuers, unlike debit card issuers, typically report your payment habits to national credit bureaus. And your payment history – payments made on credit accounts from the past seven to 10 years – is the single biggest factor in your credit score, accounting for 35% of your score. 

I should have great credit, in theory: I make transactions in my name, I never miss a rent or utility payment, I buy my own groceries, I pay my tuition in scholarship, I have a steady job, I operate a photography business that turns five digits in annual profit, I make large capital investments for that photography business, but I don't have any credit history. 

Recently my older roommate who had managed our utilities – gas, electric, water, and internet – moved out and I had to take on those responsibilities. I called each respective company to start service in my name, and because I lacked a credit history, I had to put down more than $400 in security deposits. Granted, I'll get this money back in less than a year (as long as I make all payments on time), but those hundreds would still be in my wallet if I had a more robust credit history. 

So while I've been financially responsible with my debit card, that good behavior hasn't paid off for me in the same way it would if I had been using a credit card.

Protecting purchases

In March, I bought a $15 vintage camera lens cap from a random online seller. Within 48 hours of making the purchase, the order was canceled by the seller and my debit card was silently charged for more than $300 in random purchases unfamiliar to me. Though I have no solid proof, I believe the seller phished my card information. I called my bank, since I had used my debit card for the transaction, and it was sorted out in a couple of days. Thankfully, my money was eventually refunded by my bank. 

I was lucky to have caught the phisher and to have enough money in my account to support me until my $300 was refunded. But if I had bought that lens cap with a credit card, I wouldn't have to depend on luck. Instead, I could rely on the purchase protections that come with most cards.

The Chase Freedom Flex® card, for example, doesn't charge an annual fee but still provides protection for 120 days on new purchases from the purchase date (up to $500 per claim and $50,000 per account). And the *Blue Cash Everyday® Card from American Express protects purchases for 90 days after you buy the item (up to $1,000 per purchase or $500 for purchases affected by a natural disaster, $50,000 per account). Terms apply.

*Purchase Protection is an embedded benefit of your Card Membership and requires no enrollment. It can help protect Covered Purchases made on your Eligible Card when they're accidentally damaged, stolen, or lost, for up to 90 days from the Covered Purchase date. The coverage is limited up to $10,000 per occurrence, up to $50,000 per Card Member account per calendar year. Coverage Limits Apply. Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

If a criminal gets their hands on your debit card information, they immediately have access to the money in your checking account. Whatever they spend is instantly gone until the situation is sorted out with your bank. And things might not be resolved in your favor – it largely depends on how quickly you catch and report the unauthorized charges. 

But if a fraudster gets their hands on your credit card information, they cannot immediately access your checking account, and you have more time to sort the discrepancies out before you lose cash. If you get phished online, like me, and a criminal only has your account number (not your actual card), you will not be held responsible for any unauthorized credit card charges. And even if you're ultimately found liable, you can only owe up to $50 for unauthorized charges under the Electronic Fund Transfer Act as long as you report your card lost or stolen within two days.

Credit cards are better for fraud protection compared to debit cards, but no matter what you use make sure to review your statements regularly and immediately report any unauthorized charges. 

Making large purchases

One of the biggest benefits of using a credit card is having greater purchasing power. 

As I mentioned, I'm a photographer. My regular photography kit costs about $5,000. This gear is a worthwhile investment: it will last for years to come, and it allows me to make so much more money than I would with a less thorough kit. But to afford this gear, I have had to be extremely diligent about budgeting for large purchases. Sometimes this means weeks of eating nothing but pasta and apples to save up for a huge upfront cost.

If I had a credit card with an introductory 0% APR in 2021 when I purchased this camera, I would have been able to buy it on credit and pay it off over time. Of course, I would have planned on paying off the purchase in full before the introductory period expired, but it still would have allowed me more time to budget and stack up back-end revenue from the purchase itself. Some of CNBC Select's favorite credit cards with a introductory APR period include the Citi Simplicity® Card and the Wells Fargo Reflect® Card.

A credit card would have also helped me with emergency purchases in the past few years. According to the Federal Reserve, 15% of Americans said they would use a credit card to pay off an unexpected expense over time. For example, when I needed to quickly replace a broken laptop two years ago, I had to liquidate and close my savings account. If I had a 0% intro APR credit card, I would have been able to buy the laptop and pay it off in a couple of months, leaving my savings account untapped. 

Using a credit card for large purchases is a smart idea as long as you can afford to pay your balance in full before the 0% intro rate expires. 

Reaping rewards

Like more than 300,000 U.S. college students annually, I studied abroad last summer. I spent five weeks in Greece studying archaeology before embarking on a research project and some personal travel through central Europe. I could have benefited greatly from the travel rewards, like lounge access, miles and points on flights, offered by many credit cards.

And studying abroad isn't cheap; I spent thousands on travel and hotels. If I held the Chase Sapphire Preferred® Card (see rates and fees), I could have earned 5X points on travel purchased through Chase Travel℠, 3X points on dining, 3x on vacation homes, 3x on gas & EV charging, 2X points on all other travel purchases during my trip and 1x on all other purchases. I could have also met the requirements for the welcome bonus. Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.

And it's not just travel – rewards credit cards have perks like cash back or points on purchase categories like groceries and gas. Some credit cards have unique benefits like exclusive event access, free museum entry or shopping discounts. Other cards offer cash back, like CNBC Select's overall favorite cash back card, the Chase Freedom Unlimited® card (see rates and fees). This card stands out for its discounts and special perks with Lyft and more — all for no annual fee.

There are many credit cards out there with many different offerings. Before settling on one, you should identify what you want out of the card, what your limitations are, and which card best suits those concerns. 

I settled on the Bank of America® Travel Rewards card, which offers cardholders travel rewards, a 0% interest period for your first 18 billing cycles on purchases and balance transfers made within 60 days of account opening then a 17.99% - 27.99% variable thereafter, and a large welcome bonus.

Here are a couple of things I considered when applying for my first credit card:

Welcome bonus

It's never a good idea to overspend just for the sake of getting the welcome bonus. I knew that my usual spending could qualify for the welcome bonus, which offers 25,000 online bonus points if you make at least $1,000 in purchases on the card in the first 90 days. These points can then be redeemed for a generous $250 statement credit toward travel and dining purchases. 

Rewards

Rewards are an exciting feature of many credit cards. I travel quite a bit, so the card's travel rewards program was attractive to me. The card offers 1.5X points for every $1 spent on eligible purchases.

Depending on the credit card you opt for, the rewards may not be as robust or as swoon-worthy as those offered by top-notch rewards cards like the Chase Sapphire Reserve® (see rates and fees). But biting off more than you can chew financially and applying for a card above your means is a poor financial decision. Apply for a credit card that makes sense for your lifestyle and make sure you fully understand its terms and conditions before submitting your application.

Annual fee

I don't want to pay an annual fee. My financial situation is a bit erratic at the moment, and I don't know if I will have enough money in the bank next year to adequately budget in an annual fee. So, the Bank of America Travel Rewards credit card, which doesn't have an annual fee, seemed like a smart choice for my situation. 

Interest rate

Debt scares me, as it scares many other people. Because I'm graduating from college next May, I expect that I'll have a lot of expenses in the coming year. The Bank of America Travel Rewards card offers a 0% interest period on purchases for the first 18 billing cycles (after, 17.49% to 27.49% variable APR). Note that this promotional financing period applies to new purchases only, and balance transfers will accrue interest at the standard rate, plus incur a 3% balance transfer fee. This offer seems to be a good fit for me to avoid falling into debt and getting entrenched in interest within the next couple of years. 

You can apply for a credit card on an issuer's website and, in some cases, get an approval decision instantly. 

After listing my personal information, including my income and housing payment, I was approved in seconds. Have your social security number, address, date of birth and contact information at the ready.

As I begin to build my credit, I'm putting myself in a better position to qualify for lower interest rates on life-defining purchases, like a home or a car. I'm establishing a steadier financial foundation for myself, not to mention avoiding judgment in the CNBC Select office for not having a credit card. 

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Information about the Chase Freedom Flex®, Bank of America® Travel Rewards credit card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

For rates and fees of the Blue Cash Everyday® Card from American Express, click here.