Top 10 Reasons to Own a Credit Card. Just about every adult has credit cards. Every now and then, you come across people who don’t. Usually they don’t believe in credit and adamant that it leads to no good. While it’s admirable to pay for everything in cash, there are also good reasons for having and using at least one credit card.
- Beats carrying all that money around – Why carry hundreds of dollars shopping for groceries or clothes. What if you lose your wad of cash at the mall? You’ll probably never replace your lost cash but you can replace a lost credit card. Moreover, it’s easier to manage and gets you through the line quicker.
- Credit is good for you. Even if you only use your credit cards for a couple of purchases, as long as you pay it all back in a timely manner you’ll have good credit and a good credit report to show for it. This will come in handy when it’s time to buy a house or car or take out a loan.
- Credit cards make it easier to return or repair items – If you purchase a defective item, it’s easier to replace or receive a refund with a credit card. If the manufacturer or shop owner refuses to issue a refund, you can contact your credit card company. They’ll retract the payment while investigating and if it appears you did indeed receive a lemon, will make sure you’re not charged the price of the item.
- Credit Cards have rewards – You can rack up points for free gas, airline miles, gifts, and even money towards your child’s college tuition.
- Credit Cards are Global – Why fumble with international currency when you don’t have to. Just about every country accepts one of the big three credit cards (Visa, Master Card, American Express).
- Online Shopping – Though some stores accept Paypal, most don’t. When shopping online, you’ll need a credit card.
- You never know when you’ll need it – Accidents and emergencies happen. A credit card will get you a tow truck when your car breaks down, a hotel room when you’re lost late at night and even medical care.
- It helps with reservations – Try reserving a car, flight or hotel room with cash. It’s not easy.
- Extend your warranty – Credit cards extend your warranty when you purchase large items and electronics.
- You can better keep track of expenditures – With a credit card every cent you spend is listed on your statement. This helps with keeping track of money spent and makes record keeping easier.
What is a Credit Rating?
If you’re looking to purchase a house or car, your lender will probably want to look into your credit rating to make sure you’re not a risk. Your credit rating details your spending habits, but more important, it tells about your payment habits. It should go without saying someone who pays off debts in a timely manner will have a higher credit rating than one who doesn’t always meet his obligations.
While a credit rating is a good indicator of who is a good candidate for a loan, if an applicant has no credit history at all, and therefore no credit rating ,he may also have problems applying for a loan – even if he’s never been in debt his life.
To get a credit history the best thing to do is to apply for a low interest credit card. Use it to make purchases and pay off your balance right away. Soon, you’ll have an excellent credit history, an excellent credit rating and all will be well when you apply for a loan.
Keep in mind that using a credit card to live beyond your means is the best way to ruin your credit history, so use it wisely and responsibly.
10 Credit Card Mistakes to Avoid
Having a credit card is a responsibility. They are comfort, not something to make you get good things in life that you can’t. With this in mind, one must always enter the ownership of a credit card with knowledge and a sense of obligation. Here are some of the top credit card errors.
- Only pay a minimum – If you have credit card debt and only pay a minimum, you are stuck in a thick cycle. Credit card companies will love you, because you only pay a small portion and they continue to add interest. Maybe you will pay it off in a few years, maybe not at all.
- Give irresponsible teen credit cards – Bottom line? If you can’t trust a child to save money, you might not be able to believe it to be responsible for credit cards. Before giving your son or daughter plastic, ask yourself if you really believe them to pay their bills and not get carried away by spending.
- Use a credit card to buy what you can’t – Look here for credit cards. It’s not for you to buy a game system or a big screen television – unless you have money to pay for those things. Credit cards are used so that you don’t need to carry a lot of cash or use them in case of an emergency. The $3,000 television that you won’t pay for 17 years is not something you MUST have.
- Have too many cards – Isn’t that convenient? You maximize one card so you only use another. What happens when you run out of a dozen cards, what will you do? Only pay a minimum for each? You will never be free of debt like that. Having just a few or several credit cards is far better than signing up for each card out there. Having all these credit cards will help you when you want to take out a mortgage or car loan, so choose wisely. Having only two or three main cards (Visa, MasterCard, American Express) is the best.
- Buy a credit card because you like commercial or celebrity support – This may be quite obvious but get your own American Express card because Jerry Seinfeld has it just stupid. Take the time to research the best credit cards for your needs – it should have nothing to do with celebrity support.
- Not looking for the best interest rates – If you pay your entire balance every month (like yours really, ahem) interest rates might not be a big deal for you, but this must be one of your most important considerations when choosing a card credit. Not all credit cards are the same, help yourself and research the best credit cards for your needs at the lowest interest rate.
- Don’t shop around for the best benefits – Perks should not be at the top of the list of reasons you choose a credit card, but they certainly help. Getting gas, cash back, or frequent flyer mileage, in addition to low interest rates, will help seal the deal.
- Cash in the cash withdrawal check – No, no, and again no. Destroy the advance check as soon as you receive it and never be tempted to sign. This will only make you more indebted. In addition, they come at high prices, often at higher interest rates and costs.
- Don’t read all fine prints – Think you found the best card with the lowest interest rate? Read the print again. Did this number skyrocket after the first few months or one year? Choose a card that offers the best offer for life, not the most direct satisfaction.
- Register for a credit card for free soda bottles – Do you have a representative at a local mall that offers free 2 liter soda bottles or dollar store watches just to apply for one of their credit cards? Do not do it. Ask yourself why a credit card company needs to provide goods in return for your application. This encourages when registering does not allow you a lot of time to research and compare the two. Never register for a credit card of will. https://bit.ly/2YsOOy1