Ten Reasons to use Credit Cards
It is a well known fact that the personal finance experts spend a lot of energy and time trying to prevent people from using credit cards and they have good enough reasons for the same. But on the contrary, if a credit card is used responsibly, one can actually feel much better paying with credit cards than with debits. Here are 10 reasons why one should use a credit card.
1. Sign Up Bonuses
The standard debit cards offer no rewards or negligible rewards but most of the credit cards offer significant benefits when used responsibly. For example: Applicants with good credit cards can get sign up bonuses anywhere from $50 to $250. Other credit cards even offer plenty of points to be earned which can later redeemed for rewards such as travel tours, gifts and more.
2.Investment Rewards
Some of the cards offer a greater rate of cash back; in exchange one has to deposit the cash back directly into an investment account. Example: Fidelity Investment Rewards Cards and more.
3.Cash Back
If one signs up for a good credit card, he/she can earn anywhere between 1-5% back on the shopping and purchases made using that credit card.
4.Points
Many cards which provide rewards work on a points system that requires the users to earn up to 5 points per dollar spent. And when that person is about to reach a considerable threshold, he/she can easily redeem those points for gift cards, holidays, birthday shopping and more.
5.Frequent-Flyer Miles
It is a fact that every airline company has at least one credit card available these days. The cardholders rack up miles at the rate of one mile per dollar spent on the tickets or sometimes one mile per two dollars spent which keeps on adding up. The frequent flyers really benefit with this scheme and it has existed for very long in the market now.
6.Safety
If one is paying with a credit card, it minimizes the losses as a result of fraud. When a debit card is used instantly, the money is lost from the account. But this is not the case with Credit Cards using which payments can be modified as and when wished.
7.Insurance
Most customers are not even aware, that majority of the credit cards automatically come with a plethora of consumer protections such as rental car insurance, product warranties, travel insurances and more.
8.Grace Period
When one makes a purchase using a debit card, the money is debited from the back immediately. But if one uses the Credit Card for the same purchase, there is a grace period in hand within which your amount would get deducted from the bank. Thus, it gives more time for making payments and thereby easing people on their pockets and bank balances.
9.Universal Acceptance
It has been seen that certain purchases are difficult to make using a debit card. If one wants to rent a car or stay in a hotel, he would certainly feel at ease if he holds a credit card. This is because such people rent out things to credit card holders as it becomes easier for them to charge for any damages or loss done to their property.
10.Building Credit
If one wants to improve the credit score, using a credit card responsibly does help in doing so because the credit card companies report the payment activities to the credit bureaus. Debit users do not appear anywhere on the credit report.
It is understood that credit cards are not bad if they are used responsibly and wisely.
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Category: Credit Cards
