My brother asked me for advice, when he was in college, about whether he should get a credit card. I told him that he should, if he was confident that he make

My brother asked me for advice, when he was in college, about whether he should get a credit card. I told him that he should, if he was confident that he make a small charge and consistently pay the bill, on time, every month. However, if he wasn't confident that he could do this, he shouldn't. He decided against the credit card. In retrospect, I didn't give him good advice. It's not that the overall approach is a bad one, but I didn't understand or emphasize just how important it is to establish a credit history. When you're in college, credit card companies will offer you a line of credit even if you have no previous credit history. If you can charge $10 a month, and pay it on time every month, for several years… I'm not kidding, banks will lend you $750,000 to buy a house at the most favorable rates 5 years later simply based on your demonstrated ability to pay $10 a month reliably and not run up a $10,000 debt just because you can. It's a test, and it's an important one to pass - but if you aren't going to pass, don't take it (yet). You will need to eventually. If you don't take this test and pass it, banks will at best charge you a higher interest rate that could actually cost you well over 100K over the lifetime of the loan. They might not loan to you at all. So yeah… if you can't handle credit, don't do it, but be aware of how important it is to establish a credit history.