The second you think of getting a credit card, there will be many who will advise you against it. They are all right. Abusing your credit card can get you into debt and that is one of the worst things that could happen to you. However, I’ll also like to show you the many advantages of using and keeping one.[BUTTONS1]
You may have often been advised against paying with your credit cards. But, making the best use of it actually makes plastic money a boon. It helps you earn several other benefits which may not be possible while transacting through a debit card. You should know the smart way to make the use of it. On one side you may not have to worry about keeping too much of cash when you carry a credit card, however, on the other side, if it is not used within a certain limit, it can actually make you fall into a serious debt trap.[BUTTONS2]
Now, who in his right mind would deny bonuses? Getting a new credit card will make you eligible for the signup bonuses. These bonuses can range from a small $50 to a lot more dollars. Some vendors even provide reward points which can later be exchanged to get goods or services. These will only be offered to you if you get a credit card.
There’s nothing like a welcome-aboard perk. Applicants with good credit can get approved for credit cards that offer signup bonuses worth anywhere from $50 to $250 (and sometimes even more). Other cards thank newcomers by bestowing on them a large number of reward points that can be redeemed for fun stuff (more on those below). In contrast, a standard debit card that comes with a bank account offers zero money or very small rewards.
Credit cards are a lot safer thandebit cards.Withdebit cards in case of fraud, you will be out ofmoney, which can cause you to have problems with your business transactions. In contrast to this, credit cards are safer as you won’t be paying for the purchase you didn’t make. Instead, it will be on the company’s record as a lapse in their security. You won’t be out of money since you weren’t even paying through cash or getting anything out of your bank.
Most of the more significant purchases are made and the money paid through checks. In these cases, if the vendor is dishonest with you, the process of getting your money, if any exists, is quite long. Instead of this, if you were to pay by a credit card,the card company can withhold the payment in case of a claim of fraud. This way, you can get the vendor work according to industry standard.
Rewards and Points
Many card rewards work on a point system where you earn up to five points per dollar spent. Often companies will offer special three-month promo periods where spending in a certain category, like restaurants or transportation, nets you double or triple the usual amount of points. When you reach a certain point threshold, you can redeem your points for gift cards at some stores, or to buy items outright from the credit card company’s “rewards catalog.”
Your credit card rewards options are almost endless. Get a co-branded card issued by a gas station chain, a hotel chain, a clothing store or even a nonprofit organization like AAA and your rewards may increase even faster. The trick is to find the card that best fits with your spending patterns. Doing the inverse – altering your spending patterns to fit with a particular card – is foolish. But if you’re already spending a few days a month patronizing a particular hotel or airline, why not use the card that will encourage your continued patronage by offering you discounts?
The cash-back credit card was first popularized in the United States by Discover, and the idea was simple: Use the card and get 1% of your balance refunded regardless of what you bought or where you bought it. Today, the concept has grown and matured: Some cards now offer 2%, 3% or even as much as 6% back on selected purchases. Some cards, like the Fidelity Rewards card, offer a higher rate of cash back but you must deposit your cash directly into an investment account.
Paying with a credit card makes it easier to avoid losses from fraud. When your debit card is used by a thief, the money is missing from your account instantly. Legitimate expenses for which you’ve scheduled online payments or mailed checks may bounce, triggering insufficient funds fees and making your creditors unhappy. Even if not your fault, these late or missed payments can also lower your credit score. It can take a while for the fraudulent transactions to be reversed and the money restored to your account while the bank investigates.
By contrast, when your credit card is used fraudulently, you aren’t out any money – you just notify your credit card company of the fraud and don’t pay for the transactions you didn’t make while the credit card company resolves the matter.