Everyone knows that a credit card has its advantages and disadvantages. If you have enough self-control and know how to use your money wisely, you can use your credit card to your advantage. A credit card can also offer you other benefits. If you are considering getting a credit card, this article will tell you of the many things you can enjoy if you get one and use it responsibly.
The Advantages of Having a Credit Card
#1: It Can Improve Your Credit Score
A credit score is essential when applying for a loan or mortgage, and to have good offers, you need to earn a good credit score. Having a credit card and paying off your credit bills in full every month can help you build a better credit score. It will reflect on your card issuer’s report, and loan providers will see how responsible you are in paying off your debts. It can help you make a good impression on these loan providers.
To successfully build your credit, you need to keep your balance low each month. That means not spending more than 30 percent of your credit limit every cut-off. You should also treat your credit card like a debit card or only use it when you know that you can pay your expense in full and on time.
#2: You Can Earn Rewards
Credit card providers make their products more enticing by offering various rewards and incentives. That means you get something in return for every purchase you make using your card.
You can either earn and collect points and exchange them for gifts or enjoy discounts from your card provider’s partner stores. Some credit card companies offer free travel insurance or air miles. Choose the offer that will benefit you and is aligned with your spending habits to make the most of your credit card use.
#3: You Can Get Quick Cash
Some credit card companies offer a cash advance feature. You are allowed to withdraw cash up to your set cash advance limit. This service is useful, especially during times of emergencies or unexpected bills. Just be aware that quick cash can also mean higher interest rates, so make sure that you plan how you can pay it back before you withdraw your money.
#4: It Is Highly Convenient
With a credit card on hand, you do not need to bring cash. Carrying cash can also have a disadvantage. If you misplace it, there is a low chance that you can get it back. A card is easier to bring, and in case you lose it, you can immediately have it blocked and replaced.
#5: It Is a Good Recordkeeping
You will receive a credit billing statement every month, which is the list of your total spending over that period. This record can let you track where your money is going. You have all your spendings on record, which can be useful, especially when you are doing your taxes.
#6: It Lets You Spend Safely
If you use a debit card when making a purchase online, your money will automatically be deducted from your account, and it might be impossible or very difficult to retrieve it. Credit cards allow you to reverse transactions and restore money to your account.
Moreover, if your credit card is used for a fraudulent transaction without your knowledge, you can report it to your provider. They will cut off your card, and there is a big chance that they will not make you pay for the transactions made.
Credit cards are not something you should be afraid of having. They have many perks you can use to your advantage if you know how to manage your finances well. If you think that these advantages will be beneficial for you, find a trustworthy credit card provider to offer you the best credit card option. If you are looking for a credit union that can provide you with a credit card, we can help. Good Neighbors Credit Union is dedicated to helping our neighbors find the best financial tools to help them. Contact us today to learn more about our services.