What Are Some Good Reasons To Use a Credit Card?
KEY POINTS
A credit card offers a high level of fraud protection. Suppose your card is stolen and the thief happens to get your details, the good thing is that you will not lose a substantial amount of money.
With the steadily increasing demands of life, our needs are constantly changing and growing. That said, it can be beneficial to have easy access to money to be able to fulfill those needs. Credit cards present an easy way of getting money to buy different items as long as you have not exceeded your limit.
While people may be tempted to spend money that they do not have, a credit card can be a good tool in case of an emergency or if you find yourself strapped for cash before your next paycheck. When used responsibly, your credit card can offer many benefits. Read on to learn some good reasons to use a credit card.
Help Build Your Credit History
When you constantly use your credit card and make timely payments of the money you owe, you can raise your credit score significantly. Whenever you add positive data to your history, it improves your credit rating. When it is time for applying to a major loan like a mortgage or automobile loan, it is likely to be approved with a low-interest rate if your credit score is high. Using a debit card is not the same as it does not affect your credit history since the transactions are not reported to bureaus that monitor credit scores. You also build your credit history by using your credit card for a long time.
Earn Handsome Rewards
If you love to travel, you’d be glad to know that there are many credit card reward programs that you can join. The professionals behind Your Best Credit Cards explain that when you use a credit card responsibly for various purposes, your chances of getting handsome rewards will increase. One trick that you should know, though, is that you need to find a rewards program that suits your spending habits. For example, if you frequently fly, you also accumulate airline miles that you can redeem for discounts when you book your future flights.
Bonus System
When you sign up for a new credit card, the credit card company will usually offer signup bonuses to entice many people to get cards. You also get rewards in different categories like groceries, gas, and restaurants. If you want to get the most out of your card, you need to understand the rewards offered. There are various reward systems that you can qualify to get like points systems that allow you to earn some points based on the nature of your spending. You can also earn cash in points or other rewards that you can redeem when you wish.
Credit Cards are Safer
Credit cards are universally accepted, meaning that you can use them anywhere. A credit card gives you peace of mind when you travel to different places since you do not need to bother yourself with issues related to carrying currencies for several countries. Your card can also offer lower exchange rates instead of using cash for various purchases. Moreover, using a credit card is safer than carrying hard cash. This will reduce the risk of theft since flashing money in some locations can attract thieves. If you lose your card, you can call the credit card issuer, and it is put on hold to prevent losses.
They Offer Fraud Protection
A credit card offers a high level of fraud protection. Suppose your card is stolen and the thief happens to get your details, the good thing is that you will not lose a substantial amount of money. The charges to a credit card are not immediately withdrawn. When you report the theft to the credit company, your card is put on hold and you would not be liable for fraudulent purchases. If you report the case before any purchase is made from the card, you would not lose anything. In contrast, the funds from a debit card are deducted instantly, and you will lose all the money spent on fraudulent activities.
Get Cash Back
When you purchase items from retail stores using your credit card, you can get cashback. The cash reward varies depending on your purchase total. The other good thing is that these rewards can accumulate over time and add up to a substantial bonus. Additionally, your credit card can help you budget better since it consists of a built-in expense tracker.
You can analyze your spending patterns and make necessary changes. A credit card can also make your life easy when tax time comes. All your expenses are already compiled so you will not waste your time doing the same thing.
There are many reasons why you might need different types of credit cards. Essentially, a credit card is a convenient tool that allows you to quickly access money as long as you have not yet exceeded your limit. When properly used, it can help you build your credit score, which, in turn, allows you to get loans at lower rates. Furthermore, you can use your credit card pretty much everywhere, and it is much safer than carrying cash.
About Soko Directory Team
Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory
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