Credit cards get a bad rap, though understandably so. Statistics show the average American household has over $15,800 in credit card debt. With this financial burden being such a large and common problem, many people want to shy away from the little piece of plastic that carries their financial woes.
The debt problem stems from the trap of believing that credit cards offer free and endless money. That is simply not the case. However, when done wisely, there are many great reasons to begin or to continue using a credit card. Related:Credit v. Debit Cards: Which Is Safer?
1. Build Credit/Credit ScoreTo make just about any big purchase, such as a home or a car, you will need credit. You can begin to build that necessary credit with the wise and responsible use of a credit card. Even if you start small by using a credit card for particular routine purchases and paying them off on time, credit is being built in your name. The longer you use a credit card in this responsible manor, the higher your credit score will rise.
2. EmergenciesLet’s face it – at times, life comes with a few emergencies. Rarely, if ever, are we fully prepared to face scary medical or other personal emergencies. A credit card can be a safety net of sorts. If you or somebody you love needs a sudden medical procedure, or if you’re stuck in a foreign country and need to fly home immediately, a credit card can provide the necessary money to save the day. Keep Reading: Financial Mistakes To Avoid In Your 30s
3. PerksMany credit cards offer some sort of perk: often cash back, a points system, or travel miles. If you are going to be spending money anyway on groceries, clothing, date night, or gas, why not get a bonus for doing so? Do some research and see which credit cards have the right perks that make sense for you.
4. Online ShoppingUsing a credit card is a safer choice when shopping online. Since a debit card is connected straight to your bank account, choosing it as your method of payment online can be scary move. Credit cards with fraud protection can give you extra peace of mind when typing your card number into an online merchant’s website. Keep Reading:Is Mobile Banking Safe?
If you budget wisely and pay off your bill each month, there is no reason to avoid using credit cards. This is especially true when you consider their many benefits.
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