Many financial advisors often try to prevent us from using credit cards, with good reason. Many of us abuse them and end up in some serious debt. However, when using a credit card responsibly, it can really impact your life positively, and bring you one step closer to your financial goals.
One-Time Bonuses
Did you know that you could get an initial bonus from most credit card companies? If you’re an applicant with a good credit or excellent credit history, you can get approved for credit cards that commonly offer bonuses worth $100 or more in exchange for spending a certain amount in the first several months the account is open. Other cards offer reward points or miles that can be redeemed for travel, gifts cards, and merchandise.
Cash Back
Now, some cards now offer 2% through 6% cash back on certain purchases.
Rewards Points
Credit cards with reward points allow cardholders to earn one or more points per dollar in spend. Many of these cards provide bonus points for certain categories of spending like restaurants, groceries or gasoline. These can change monthly or quarterly. The credit card companies set a specific threshold to redeem points and apply them toward travel, gift cards merchandise items through the credit card company’s online rewards portal.
Frequent Flyer Miles
With frequent flyer cards, cardholders will earn a certain percentage of miles per dollar in purchases. This is a pretty big incentive for travel enthusiasts. Though how valuable this reward actually is depends on the type of airline ticket you purchase with your miles.
Safety And Universal Acceptance
Paying with a credit card makes it easier to avoid losses from fraud, because companies like Visa and Mastercard provide liability coverage for unauthorized purchases. Moreover, when you want to rent a car, you’ll almost certainly have an easier time if you have a credit card.
Building Credit
Whether you don’t have credit or are trying to improve your credit, using a credit card responsibly will help you build your credit history and boost your score.
Sources:
Investopedia. “10 Reasons to Use Your Credit Card” April, 14, 2020. https://www.investopedia.com/articles/pf/10/credit-card-debit-card.asp
