People are often advised not to use credit cards, but why? Well, there certainly are pro’s and con’s; many people abuse them and end up in debt. But contrary to popular belief, if you can use your card responsibly, you’re actually much better off paying with a credit card than with a debit card and keeping cash transactions to a minimum.
So, why should you be using a credit card? Here are 8 ways using a credit card could benefit your life:
There’s nothing like a welcome-aboard perk – just for signing up you’ll get money for nothing without a catch.
Some credit cards will pay you a percentage of what you spend as tax-free cash, which is usually credited to your account once a year.
Rewards and Points
Rewards are an undeniable reason why credit wins over cash. Like cash back credit cards, reward credit cards give you something back each time you spend on them however, instead of cash, you receive points or vouchers.
Now this is one you wouldn’t want to miss out on. Airline companies offer the chance to earn frequent-flyer miles via an affiliated credit card. The price of the plane ticket you end up redeeming your miles for will determine how valuable this credit card reward is, but many frequent flyer cards are made immensely more valuable by their mileage signup bonuses. These are often enough to put you 50%–100% of the way toward a free flight within just a month or two!
Paying with a credit card makes it easier to avoid losses from fraud. When your debit card is used by a thief, that money has instantly gone. Scheduled payments or mailed checks will bounce, triggering insufficient funds and leaving your creditors unhappy. Luckily if your credit card is used fraudulently it’s really not the end of the world. You just notify your credit card company and you certainly won’t have to pay for transactions you didn’t make. Your credit card company will resolve the matter immediately.
If you are trying to build your credit score, using a credit card responsibly will help, because credit card companies will report your payment activity to the credit bureaus. Debit card use doesn’t appear anywhere on your credit report, so it can’t help you improve your credit. If your credit is quite bad at the moment, but you want to improve it, then a card from somewhere like Vanquis could be a good way to build up a good credit rating.
People often don’t realise that most credit cards automatically come with endless consumer protections such as rental car insurance, travel insurance and product warranties. It can be a big help when you buy
Some purchases are tricky to make with a debit card. When you want to rent a car or stay in a hotel room, you’ll always have an easier time if you have a credit card. Rental car companies and hotels like you to pay with credit cards as it’s easier to charge customers for any potential damage that is caused to a room or car. If you want to pay via debit card, the company may insist on putting a hold of several hundred pounds on your account.
It’s clear to see that using a credit card responsibly has its perks. Give it a go and see if it works for you.