Mention credit cards, and many people’s instant reaction is to think of debt and money problems. But it doesn’t need to be that way. Here are nine ways of benefiting from credit cards in your daily life, without a red cent of debt being involved.
1) Improve Your Credit
Credit cards can help you build up a better credit rating over time. By using them responsibly and paying your bills promptly, you’ll add positive entries to your file every month. This can help overcome any previous bad credit issues, or just build up a solid history you can later leverage for a low-cost mortgage or other loan.
2. Free Money or Gifts
Many credit cards actually pay you to spend using them through cashback or rewards programs. The amounts involved may be small, but so long as you pay your balance in full each month to avoid interest, it really is money for nothing.
3. Easier Budgeting
Everything you spend on your card is itemized on your monthly statement. If you transfer all your everyday spending onto your card, it makes it easier to keep track of your budget and leads to better financial stability.
4. Balance Your Spending
A credit card also gives you some leeway for paying bills over the month. If a large expense falls just before your payday, you can use your card to pay it without clearing out your checking account. If you pay your statements on time, this facility costs you nothing, unlike a typical expensive bank overdraft.
5. Better Security
If you carry cash, you’re always at risk of losing it or having it stolen. With a card, a quick call to your provider limits the damage as soon as you notice a problem.
6. Access to Services
Most hotels and car rental companies demand a credit card as a safeguard against damage or additional expenses. If you don’t carry a card, using these services becomes more difficult and expensive.
7. International Use
Credit cards provide a secure and inexpensive way of paying for goods and services while you’re out of the country. You can also use them to withdraw cash almost anywhere in the world, and you’ll pay much less in currency charges than using a money exchanger.
8. Emergency Funds
If you ever need fast cash in an emergency, you can use your credit card in an ATM even if you have no money in your bank account. With most cards, this will cost you nothing so long as you clear the debt when you receive your next statement.
9. Consumer Protection
Lastly, if you pay for expensive goods with your credit card, you’ll receive a higher level of consumer protection if something goes wrong. For example, if your purchases are faulty and the retailer refuses a refund or exchange, the credit card company needs to cover your losses by law.
There’s no doubt that some people get into financial difficulties by using their credit cards carelessly. But there’s nothing that says this is inevitable.
If you view your card as a helpful service rather than a source of instant easy cash, you can enjoy the many benefits without the risks.