Ask people if you need a credit card and the answer will likely surprise you. Some are in favor of credit cards, while others have their reasons to stay away.
But regardless of what the naysayers say, a credit card can be a valuable tool for improving your finances. In this article, we will get into more debt why you need a credit card. So with all that out the way, let’s start.
1. A Means For Better Credit Score
This is quite possibly the best reason why everyone needs one of these plastic cards. Every person has something called a credit score. A credit score is a number between 300 and 850 that determines your creditworthiness.
Creditworthiness is a valuable factor in the eyes of banks and financial institutions when determining the rates on loans. Everyone should have a higher score. With a higher score, consumers get better rates on loans and such.
Showing responsible use of a credit card improves your score. If you show good responsibility and do not go into too much debt, your score will increase. The higher the score, the less you’ll pay on an auto loan, mortgage loan, or similar loan.
2. It Comes Handy In Emergencies
Quite a lot of people live paycheck to paycheck. When that’s the case, an emergency such as a sudden medical bill or car repair can be the end of you. Without cash on hand, paying for such emergencies can be very difficult.
You will likely have to take out a loan from a payday loaner or borrow from friends and family. With a credit card, that doesn’t happen. That’s because it allows you to use more money than you own.
You will have to pay it back, but that doesn’t change the fact that it can be an option. Many people use credit cards solely for this reason and this reason only. It can come in handy in emergencies and provide a lifeline when you don’t have cash on demand.
3. Awesome Rewards
In recent times, credit cards are more than pieces of plastic you keep in your wallet and use to pay for things. Nowadays, a credit card can also serve as a cashback card. What this means is that you get something in return every time you make a purchase.
While some specific cards are limited to only a couple of vendors, others are more commonly used. In addition to cashback and rewards, you also get discounts. Bear in mind, we’re still talking about associated vendors and not every shop you come across.
Airlines and retailers offer tons of discounts when using their services or buying their products. That can come in handy, especially if you like to travel a lot. One of the most common credit card rewards is in the form of air miles.
The more you fly with an airline, the more you get rewarded. If you’re interested in how cashback, rewards, and discounts work with credit cards, then make sure to visit comparecredit.com and take a look at what they have to offer.
4. A More Secure Form Of Payment
Ecommerce is so huge that anyone can buy products or services from the comfort of their home. Security has always been a big issue in any field of finance. Considering that anyone can rob you and take all the cash on hand, a credit card remains to this day the safest form of payment.
If you happen to find yourself in such a situation, calling the bank and telling them you’ve been robbed eliminates the issue. They will immediately cancel the card and waive any charges or fraudulent payments that might have happened. In short, they will not hold you liable for anything.
On the other hand, you’re not getting the same level of safety and security with a debit card. If someone takes your debit card, you are held responsible if someone makes fraudulent payments. What this means is that the fraudulent payments will be deducted from your account.
5. Excellent Way Of Tracking Your Spending
Another reason that falls under the “personal finance” hat is the fact that you can keep track of what you’re spending. A lot of people mismanage their finances by spending money on stuff they don’t need.
What’s even more important is that they have no idea what they’re spending their money on. A credit card makes personal finance truly personal. You can log in to your financial software and see where exactly your money goes.
This can help you analyze spending habits by keeping a detailed record of all purchases made. A credit card is especially important for those who want to create a budget and keep track of it.
6. You Get Merchant Protection
Another risk of paying with cash is that you can’t do anything if the seller’s product doesn’t come through. The only thing you can do is go directly to the seller with the receipt and hope for the best.
That doesn’t happen when paying with a credit card. Instead of going your way and arguing with the seller, the credit card company will do that for you instead. All you need to do is simply call the company and give them all the information they need to conduct their investigation.
Sooner or later, you will receive a chargeback.
7. It’s Convenient
There isn’t a more convenient payment method than a credit card. It doesn’t matter if you’re in another country or paying at the gas station; a credit card is the most convenient way to pay for goods and services.
When on the subject of paying for things abroad, another reason why you need a credit card when traveling is that you don’t have to worry about exchanging from local to foreign currency – the card does it all.
Those were our 7 reasons why you need a credit card. With many more, the fact remains that it can be a valuable piece of plastic to have in your wallet. Whether paying for goods and services, accumulating reward points, or improving your credit score, a credit card is something that everyone needs.