One day, you decided you wanted a credit card. You started by saving $1000 in an emergency fund so you could make payments on your credit card even if you had no income. Good move. Then you started a savings account and added to it regularly. After you got in the habit of paying yourself every month, you knew you were ready for credit.

You applied for a secured credit card with a $500 deposit, which you paid for out of your savings. The credit card company approved your application and set up your account, you charged whatever you wanted up to your $500 credit limit and you paid them back on time by making sure they received the minimum payment by its due date. That was smart—it helped you start building your credit history.

You set up a way to monitor your credit score so you could watch your credit score grow. You looked through options on the internet, like this list on The Simple Dollar and chose one. Then you signed a credit card agreement with a favorite retailer. The credit limit was $1000 on your first unsecured credit card and you watched your balance carefully, making sure you always stayed under that amount. You always paid by your due date and sometimes, you even made a payment larger than the minimum payment. Pretty soon, credit card offers were coming in daily, some of them with no annual fee and a 0% annual percentage rate (APR). You reviewed the offers and chose well, even paying close attention to the Schumer boxes. In time, each card had a $5000 credit limit. With your excellent credit report, you had no problem securing a car loan and a few years after that, a mortgage. Times were good! You got a motorcycle and took out a home equity loan to build a pool with a spa.

So, there you were, happily charging along, paying their monthly minimum on time, being charged the minimum finance charge and earning an outstanding credit report and FICO score in the process. (Credit card companies love people who make their minimum payment on time. It almost guarantees they will never be out of debt and will be paying interest for the rest of their lives. They love you, deeply and truly.) One of your cards had a variable rate, but the perks were great; you got cash back with every purchase and earned points toward free airfare. Everyone was happy. You got lots of nice things and travelled a lot and the corporation continued to get rich beyond imagination, thanks to you and the millions of others who did (and are still doing) exactly the same thing.