Why Is It A Good Idea To Have A Credit Card?

The idea of having a credit card is one of those things that can prove to be very beneficial, but it also has challenges. Realistically, having a credit card is great, but it doesn’t come without downsides. Yet at the same time, there are benefits that you receive from using a credit card as well. Why should you have one? Here are some of the reasons why we think it makes sense to get a credit card.

You build your credit score

If you live in the US, lenders will always look at your credit score when you borrow money. Having a credit card helps you build up your credit score. If you take any form of credit and pay it back on time, then that really helps quite a bit. Having a way to increase your credit score is always handy. And in this case, it does make a lot of sense to have a credit card to increase your credit score.

Getting cashback benefits

Another aspect we have to think about when it comes to credit cards is that you can get cash back. A lot of purchases are qualifying for a cashback system. So it does make sense to have a credit card where you can accumulate all these options. In order to stay competitive, a lot of credit card providers will give you cashback opportunities, so keep that in mind.

Having purchase protection

A great thing about credit cards is the fact that you can have purchase protection. If the card gets damaged or stolen, then you will have it replaced. And of course, if someone tries to spend on it, then you can get reimbursed. That’s great and it just goes to show the value that you can obtain. In the end, it’s well worth considering, especially if you want to stay safe and protect yourself.

The same thing is valid when it comes to fraud protection. You can encounter times when someone steals your card info or they lead you to a fraudulent website. If you purchase from there, but eventually you learn that you were scammed, the credit card company can stop the card. Or in many cases, they will reimburse you, which is even better.

Rewards

Aside from cashback, credit cards can also offer rewards. For example, based on the amount you spend, you could unlock certain benefits. Or if it’s a travel credit card, the amount of miles can end up giving you plenty of rewards. The idea is that you will be rewarded by the credit card company when using their card, although the reward will always vary. But at the end of the day, it is a way to get rewarded, and it’s certainly worth thinking about.

Using it as an emergency fund

Some people don’t have an emergency fund, but they do want to find a way to create one. And a credit card can indeed be one of those ways you make an emergency fund. Sure, it’s not the most appealing approach, but it totally works, especially if it’s done correctly. And it can definitely help you save a huge amount of time and effort.

Deferred interest

Some credit cards have deferred interest, which can prove to be extremely appealing for a lot of credit card users. Of course, not everyone might like that approach, but the ability to defer interest is exciting and it can provide a way for you to avoid high interest rates.

Cash advances

You can try to use the credit card as a way to get your cash advance. And that’s very exciting, not to mention an appealing proposition. It does come with caveats, one of them being the fact that you might end up overpaying interesting. But if you need money fast, the credit card can be a good solution, and one of the things that you can count on.

Convenience

Needless to say, credit cards are very convenient and they do allow you to pay for the stuff you want, whenever you want it. Having access to the funds you need at any given time is always appealing. And while there will be challenges that arise, that’s the most important thing. You want to address any of the challenges that appear, and you want to do that adequately.

Remember, the most important thing when it comes to credit cards is that they are a tool you can use as you see fit. However, you want to avoid cases when you use it on stuff that is not urgent, or very much a necessity. That’s the problem that a lot of people encounter. They see credit cards as an unlimited source of money. However, you still need to pay interest and there are other costs coming from it. As a whole, credit cards are a great idea, but you must use them correctly!