Most of us are no financial experts. We can barely manage ourselves using our basic knowledge of personal finance. Despite the limited financial knowledge of the average person, you’d be hard-pressed to find someone who wasn’t advised against the use of credit cards. It feels like there’s some sort of unspoken rule that, as soon as someone starts making money, it’s society’s obligation to warn them against using a credit card.
In their defense, irresponsible use of credit cards is indeed disastrous to the financial health of the user. However, if used properly, there are a myriad of benefits to using a credit card, ones that often can’t be achieved using debit cards or cash. If you’re looking to improve your financial health, here are 6 reasons why using a credit card may just be the right tool for you.
1. Improve Your Credit Score and History
If we are to discuss the benefits of using a credit card, then the most important one would be to improve one’s credit score and history. Whenever you’re using a debit card, you’re withdrawing from the money you’ve already saved. Meanwhile, the money you access using credit cards is borrowed, and the speed and commitment in which you pay it back give the bank a great idea of how well of a borrower you are. This credit history, along with a sparkling credit score, can later on give you much better deals on payments, installments, and different purchases. It’s especially helpful in getting an auto loan with low-interest rates – something you’ll completely miss out on in case you don’t have a credit history in the first place.
2. Benefit from Online Deals
We have to admit that, in this digital age, almost all of the best deals are only available online. The fact that we’ve become confined to the corners of our homes during this pandemic makes the deals even hotter, and online shopping even more appealing. When you look at it this way, isn’t using a credit card to getting items that you’ll get anyway, albeit for a discounted price, one of the best ways to save money? In some cases, using a credit card can even cut down the shipping expenses. It’s a winning deal no matter how you look at it!
3. Get Rewarded for Your Loyalty
Is there anything better than saving money on your purchases? There is one thing, and that’s getting rewarded for purchasing. It often sounds too good to be true, but it’s an indisputable truth that most credit cards have customer loyalty programs that give their holders awards or points for using the card in making purchases.
- Also see: Credit Card Comparison Tool
4. Get Protection Against Fraud and Theft
Misfortune often happens. Whether you accidentally lose your wallet or it gets stolen, there’ll be no way to recover the cash you’ve lost. Thankfully, that’s not the case with credit cards. As the financial specialists at www.moneymash.com point out, you’ll be able to freeze your card as long as you report its theft or fraudulent activity in a timely manner. Even if the card has been used, you won’t be held accountable for the purchases.
5. Get Insurance and Protection
You’ll be glad to know that there are many credit cards that’ll provide time-bound insurance on your purchased items. If something you’ve purchased gets lost, stolen, or broken, you may get your money back according to your credit card’s terms of agreement. Moreover, using a credit card can give you an assurance that you’ll receive the items you’ve paid for. At times when the merchant fails to come through the deal you’ve already paid for, you can file a complaint with the credit card service provider and they’ll take care of the procedures on their own.
6. Get Out of a Pinch
Most of us only ever carry the amount of money we think we’ll need for the day. Unfortunately, misfortunes often have their way with unpleasant occurrences. In these cases, having a credit card on hand can provide you with an instant solution to the matter at hand. Once the dust settles, you can simply transfer back the amount from your savings.
Using a credit card irresponsibly is a recipe for disaster. However, there’s no reason why you should get a credit card if you’re a responsible and committed person. In fact, there is a myriad of benefits to using a credit card, starting from improving your credit score and credit history to saving money, getting rewarded, and being protected. A credit card may even save your life in emergency situations! At the end of the day, it’s about learning how to use your credit card properly.
