For many, the credit card can strike fear into the eyes. Particularly for those uninformed. They’re those “evil things” that can accumulate debt and mean you have to live on the streets. Of course, that couldn’t be further from the truth if managed properly.
In truth, they’re extremely handy things to have and will help you secure things like mortgages.
Today, so many millennials are turning their noses up at credit cards, believing it to be the point of no return, a world that eventually ends in financial ruin. But they are an important part of your financial life.
Building credit is a huge part of life and there are hundreds out there which can help benefit you. There are many reasons why you should, responsibly, use one too…
You Need To Build Credit
It can be scary having credit card debt but if you pay off your balance in full and keep your debt under 30% of your credit limit it is good for your credit. This will in turn help you secure things such as renting or buying a place to live, signing up to a mobile phone contract or getting car insurance.
The bottom line is that you need to build credit, and a credit card can help you do just that.
If you make all your payments on time, keep a low or no balance, and use your card responsibly, you'll soon see yourself getting a high credit score and easily qualifying for all types of purchases.
Beyond that we mentioned above, having great credit can also help you keep your job! That's an important one.
More Secure Than Debit Cards
If you’re subject to fraud and someone has stolen money from your account you’re much more likely to get it back if it’s taken from a credit card. Using a credit card that information is taken from will reduce your liability charges and generally see the money back in your account quicker.
Additionally, you’ll have legal protection should something like your travel agent go bust and you’re yet to go on your holiday. It’s generally a safer way of paying, and of course you can then just pay off your bill at the end of the month.
Plus, there's a huge convenience factor. If your debit card is stolen, the money comes right out of your checking account. What if you had automatic bill pay setup and then you overdraft because the money is missing? Or what if you can't make rent this month because all your cash is gone?
With a credit card, if fraud happens, you simply don't pay the bill. However, with a debit card, you have to wait until the money is re-deposited back into your account, which can take months!
That makes credit cards much more secure than debit cards.
Earn Rewards For Your Spending
When looking for a credit card, you’ll see dozens of cards offering you rewards when you spend. For many these can be incredibly useful, like picking up air miles or receiving cash back for every time you spend X amount.
Take a look at a credit card selector to find the right card for you and you’ll be able to discover which rewards will suit your spending more. Of course, there’s no point in even going for one based on rewards if you’re not planning on paying your bill off in full each month. No card company will offer you rewards higher than the interest rate.
However, if you're spending the money anyway – such as on gas, groceries, or eating out – why not get paid for that spending? It just makes sense to be rewarded for the things you're already doing!
Getting a credit card doesn't have to be the scary proposition that Dave Ramsey and other financial pundits make it seem. You can responsibility use a credit card and even be rewarded for your spending.