Credit cards can be either beneficial or dangerous. It’s nice to have a trusty square plastic that you can use whenever you need it. It can be a great resource when purchasing big stuff such as gadgets and other materials. It is also known nowadays that more and more stores are accepting credit cards. The cashless future is upon us and it is simply inevitable. Get a credit card now and learn some of its main advantages.
Imagine loaning or buying a gadget with zero interest. Some credit cards offer 0% periods meaning you can effectively benefit from an interest-free loan. You need to make the minimum monthly payments though, and clear your balance before the 0% offer ends though otherwise you’ll be charged interest. The average interest rate is 18% – pretty hefty, which is why you should pay your debt off before interest kicks in.
Credit cards are actually banks and companies’ way of saying thanks to its customers and clients. There are many credit cards that have great reward programs, but they need to work for you. There is no point overspending or buying things you don’t need just to get points. So, think about how you use your credit card and then choose which program would benefit you most. You can spend credit card rewards points on all sorts of things, from flights and car hires to petrol and grocery shopping. Also, check if there is an annual fee for the card. Sometimes these can be paid for with points but you need to make sure you would earn enough points in the year to pay off the fee and get something with the leftover points.
You get more protection if you pay with a credit card than if you pay with a debit card, cash or cheque under something known as Section 75 of the Consumer Credit Act. If you buy something that costs between £100 and £30,000, you will get your money back if it all goes wrong. In other words, if the company goes bust, or your purchase is faulty or doesn’t turn up, you won’t lose out because you can claim the money back from your credit card provider.
Cash can be dangerous when you are freely rooming it around. While there’s only a small chance of having lost or stolen cash returned, a credit card can quickly be cancelled if you lose your wallet. Most financial institutions also have security processes in place to protect you if your card has been lost or stolen or if you suspect your account has been used for a fraudulent transaction. If you’re in any of these situations, make sure to contact your bank to report the issue as soon as possible.
Credit cards give you an emergency line of credit
We will never know when an accident or an emergency will happen to anyone in your family or to you. Credit cards can be a financial safety net if you don’t have enough cash or savings to cover any unexpected costs that arise. Remember that you have to repay everything you owe, though.
A credit card can build your credit rating
Everyone needs to maintain a good credit. Your credit card account details and payment history make up a key part of your credit file. If you keep your account in good standing, this information will help you build up a good credit score, which could increase your chances of approval for other products such as payday loans or a mortgage.