Six Reasons Why A Credit Card Makes Sense

Many personal finance experts strongly discourage people from using credit cards. After all, debt on personal credit cards adds up quickly, which in turn becomes a major source of stress.

Although true, when credit cards are used wisely, they offer a wide range of benefits.

Benefits of Credit Card Use

  1. Building Good Credit – If you currently have a low FICO score or have little to no credit history at all, using a credit card responsibly will improve your credit. Unlike debit cards that do nothing for improving a credit score, credit cards do. For example, if you filed for bankruptcy within the past two years, a reputable credit improvement program will increase your credit score to the point of making it possible for you to qualify for a standard interest automobile or mortgage loan. As part of this program, you secure a credit card in order to help build up that credit score again.
  2. Earning Cash Back – Although you will have no problem finding a cash-back credit card, the goal is to find the right one. With some credit cards offers, you will earn between 1% and 5% on all purchases made. This equates to you getting a discount on every item that you buy.
  3. Investment Rewards – Some credit cards with a cash-back offer will deposit the money directly into an investment account. In addition to helping you save, this encourages investing.
  4. Frequent Flyer Miles – Especially if you travel often for business or pleasure, a credit card that provides frequent flyer miles is extremely beneficial. Most airlines have one credit card offer, sometimes more. Because the value of the card depends on the airline tickets that you use, as well as specifics that are outlined by the card issuer, you should consider several different credit card options.
  5. Financial Safety – Unfortunately, there are times when automatic payments are posted late or financial losses occur. By using a credit card, these scenarios are avoided. With a debit card, any fraudulent activity hits your account immediately. Even when the card issuer guarantees money back, this typically takes a lot of time. In comparison, you lose no money when fraudulent activity occurs on a credit card. In this case, you receive notification from the issuer and are not out any money. 
  6. Insurance Protection – You may not be aware that the majority of credit cards offered today come with various types of consumer protection in the form of insurance. This includes travel insurance, rental car insurance, and so on. Because the type and amount of insurance protection is unique to each card, you want to shop around.

By using credit cards responsibly, you get to enjoy numerous benefits. Most importantly, make sure that the outstanding balance on the card is paid off in full every month. That way, you avoid excessive interest, late fees, and any other penalties.

If you have a tremendous amount of outstanding credit card debt from the past and want a fresh start, you can always contact one of our Norwich bankruptcy attorneys. The attorney will assess your situation and then make the appropriate recommendation to help you rebuild credit.

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