There is this continuous debate whether it’s good or bad for a person to have a credit card. Some say that you only end up in debt when you use a credit card, but what they don’t know is that it depends on the person using it. Many people can be living proof that there is a lot of perks when it comes to having one.
There are smart ways how to use a credit card that will benefit you in your purchases as well as preventing you from getting in debt. Other people also say that using a credit card is better to use than a debit card if you know to use it responsibly. As long as you’re making sure you have enough available credit limit, paying your balances full monthly and keeping track of your purchases, you’re capable of handling your credit card.
Here are seven reasons why you should use your credit card:
Rewards, Points, and Bonuses
Banks that offer credit card also have their promos when you sign up for one. They provide awards based on a pointing system that for every dollar that you spend you’ll get corresponding points. They even have a three-month promo where you can get double or triple the points when you use your credit card on certain restaurants or stores. When you have enough points, you can exchange them for gift certificates, freebies from their partner restaurants, or get items from their online rewards catalog. It’s best that you have a type of credit card that is in line with what you frequently spend on, so you’ll have more significant rewards.
When you have a consistent good credit score, you can apply for additional credit cards with sign-up bonuses that can reach $500 or more. There are even banks that offer start-up reward points that you can use to redeem items and gift checks. This rewards and points don’t usually come with using your debit card, or they offer it only on a minimal level.
One advantage why you should use your credit card if for protection. Using a credit card than a debit card protects you from possible fraud. When a debit card is stolen, your money in that account can go missing instantly, and it takes a lot of time to resolve the issue and return your money into your account. But when you, unfortunately, have your credit card stolen, and you see that they made a transaction, you can report it to your credit company, and they will resolve the issue. At the end of the day, you won’t be charged with anything, and the money will go back to your account.
When you purchase an item and when something goes wrong like the delivery didn’t push through, or you want to cancel an order, it will not reflect on your billing statement, or you can get the money back from your credit card provider. Unlike when you’re using your debit card, you’re unable to do these things because a deduction is already made to your account.
Borrowing For Free
The central concept of credit cards is that you can make purchases and get to pay it later when you have the money. Credit card companies often offer 0% interest periods when you pay in installment. Just make sure that you complete your payments before the end of the period because the interest rate will go up. Some companies even offer “buy now and pay a month after” promos without interest.
If you’re on vacation abroad or going on a road trip, it is much easier to use your credit card in your expenses because certain purchases don’t accept a debit card as payment. There are rental car companies and hotels that prefer credit card payments rather than a debit card because it’s easier to give their customers extra charges when they cause any damage to hotel rooms and rental cars.
Especially when you’re going out of the country, foreign establishments don’t always accept a debit card as payment. Additional bonus, when you use your credit card for your flight ticket payments, they also came up with a pointing system that gives you discounted or free flights.
Good Read: 9 Credit Card Tips To Take With You Overseas
Spending While Earning
One of the benefits of using your credit card is having cashback opportunities. Depending on the requirements and guidelines, cashback can reach up to 5% percent. When you purchase some items under promotion, they bring back to your balance a percentage of what you paid. It’s a win-win situation, where you get to buy things you need, and the credit card provider is satisfied with your activities, and you also get to have a portion of your cash back to your account.
Credit card companies provide their customers with protection in means of giving them insurance on their purchases. In this way, you don’t have to get separate protection for your products. Some of the insurance they can provide is when you avail rental cars, and traveling insurance when you go on a vacation or any extra warranty for the products that you buy using your credit card.
When you use your credit card, it builds up your credit score so you also get to avail of the promos your credit card company can give. You can request to get a 0% interest loan and get the bank to approve your request faster and easier because of your good credit history. They’ll review your account, and they’ll see that you use your credit card right and realize that you’re less of a risk to the bank when you apply for a loan.
You can have the luxury of getting all the perks in the list above if you use your credit card. But in using your credit card make sure that you know the smart way to use a credit card like avoiding to spend more than you can afford, not going over your credit limit, and not being unable to pay your billing statements in full and on time.