Finance experts usually try to prevent people from using credit cards for a good reason. Because many of use irresponsibly use their cards and get into huge credit card debt. But it is fact that if you can use plastic money responsibly, you are better able to pay with credit cards than a debit card and keep cash payments to a minimum. When used wisely, a credit card could be an excellent financial tool for you. Even you can earn and save a lot of bucks every month with your credit card.
Here is how a credit card can be a smart financial move and why you should get one in 2022.
When it comes to make purchases online, there are several purchases that cannot be completed with debit cards. Hotels and rental car companies also want their customers to pay via credit cards because it makes it easier for them to charge customers for any damages or overcharges. This is the reason, you must have at least one credit card to make online purchases and other day-to-day payments conveniently without facing troubles. Be it an online purchase from an international brand or a hotel reservation for your family trip, a credit card can be used to make easier payments.
Enticing Perks, Benefits, and Rewards
Credit cards are usually marketed with enticing perks and benefits to get more customers. almost all cards come with enticing benefits and perks like sign-up bonuses, cashback, 0% APR, free air miles online shopping discounts, etc. By getting the right credit card, you can earn and save a big deal of money every month. Over time, credit card perks and points can add up to sizable bonuses so you can get more in less.
They let you Transfer your Balance
With help of a balance transfer credit card, you can move the debt of one or more cards to another. Such cards usually come with 0% or lower interest rates on balance transfer transactions. As a result, you can move and pay your debt via a new card without paying towards interests. Since balance transfer credit cards are a great way to manage and pay off debt effectively, you still need to pay what you owe. So, make sure to pay all the amount before the due date or a dedicated period of time to prevent any additional charges or higher interest rates.
Credit Card Track your Spending for you
Have a tough time with expense tracking? Credit cards come with built-in expense tracker. Every purchase or payment you make via credit card is recorded online with all important details and information. A credit card allows you to track details like when, where, how much, and how often you spend your money throughout the month. This helps you stay on top of personal finances so you can budget accordingly to save. Spending tracking also becomes handy when it comes to file income tax return.
Credit cards help you build credit
To get a new credit card, you need a good credit score. Having no or poor credit history makes you invisible in eyes of financial institutions. That’s why, building good credit is important. When you use credit cards responsibly, it helps you build good credit so you can easily apply for a mortgage or personal loan in near future. A credit card is a reliable and quickest way to build good credit. Credit card payment history adds up to 35% of your overall credit score. So, use your credit card to make purchases and payments throughout the month and make credit card payments on time. Also, use a little portion of your available credit limit to experience a hike in your credit score.
The Bottom Line
People who are conscious of their ability to make monthly payments on time, enjoy better use of credit cards. If you really know how to use credit card wisely, be quick to move more of your payments and purchases to credit card and minimize cash transactions.