Every day we are bombarded with personal finance advice that we should not be using your credit card and accruing any debt. Right now there are millions of Americans who are drowning in a sea of credit card debt. So you can see why this may sound like good advice. But is Americans’ debt the fault of the credit cards or rather is the debt the fault of the consumer? This debt doesn’t come from a credit card, it comes from a lack of self control. You see, a credit card is a useful service – if you use it correctly.
Here in this article I am going to share you with a few reasons why it is a good idea to use your credit card regularly. But of course you must remember that you should not charge more on your credit card that you can pay off by the end of the month. You should treat your credit card as if it were a debit card. It’s your own money you’re using, not the banks. Here are the 5 reasons.
– Credit score. Your credit card usage makes a big impact on your credit score whether you like it or not. If you don’t have credit, you can establish it by using your credit card. This will help you out later if you want to get a loan for a car or a house. If you make your credit card payments on time, every time, you should expect your credit score to rise. Doing so will land you a lower interest rate and can save you tens of thousands of dollars on your home loan.
– Security. A credit card is full of security abilities. If you lose your card and report it in a timely fashion to your credit card company, you will not be responsible for any fraudulent charges made on it. If you make a purchase online and that item never arrives, you can make a chargeback and get your money back.
– Monitor your spending. You can really track your spending habits extremely well when using a credit card. In order to make this work, charge everything on your credit card. Then you can log into your online account and track your expenses. Why is this a good thing? By doing this you can budget your money wisely by seeing exactly how much you spend on food, bills and entertainment.
– Rewards program. A lot of credit cards come with a rewards system. Here’s how they work. For every purchase you make you earn points that you can later redeem for gift cards. By using your credit card regularly you can accumulate quite a bit of points which means free perks for you.
– Worldwide access. When you have a credit card, you can buy something, even if you don’t have cash in your pocket. This applies to any part of the world. You will no longer have to worry about having local currency, which is useful if you’re a world traveler. So whether you are at your local grocery store or whether you are in a hotel half way around the world, your credit car will still work the same.