[feanaro]

> Even if you are not earning extra points, using a credit card may be helpful for some who are trying to establish a credit history, which will be important if they wish to borrow larger sums (auto loans, home mortgages) in the future.

Ah, that explains part of it, I guess. This isn't a thing in my European country.

What I don't understand is why simply using a credit card would count more towards establishing you as a good creditor than not even having to use a credit card at all. I guess that's a weird bias in the system?

[lotsofpulp]

It is not a weird bias. Paying off a revolving credit card balance every month is not that big of a signal about your future likelihood of repaying loans in a timely manner, but it is a signal.

Not borrowing any money, and hence not having any history of repaying borrowed money is zero signal.

If it was true that people who never borrowed money were more likely than repaying borrowed money on time than people who regularly borrowed money, then a lender would have already noticed this in their data and would have offered a more competitive financing product in the marketplace.

Since that has not happened, it is reasonable to surmise that the tiny signal of maintaining a small revolving credit card loan with timely payments is better than the zero signal of not maintaining any loan balance.

Note that having many tiny credit card revolving loan amounts is viewed negatively.