Humans often fear what they don’t understand. Certain concepts get a bad rep because a small handful of people spread out-of-context horror stories usually based on their ignorant misuse of something. But for some strange reason these horror stories eventually becomes popular opinion. Fear is a powerful tool!
A primary example of this phenomenon is the demonization of credit cards. Blaming personal debt on a credit card is like a compulsive eater blaming their disorder on cake. The benefits of credit cards are often overshadowed by the stories of irresponsible decisions made by a small group of people.
But if you want to know about the 5 common benefits of using a credit card, keep reading.
1. Build Good Credit
Building a good credit score should be one of your primary motives for using a credit card responsibly. A good credit score can offer greater financial leverage in the future. For instance, mortgages or student loans are near impossible to obtain without a good credit history.
So, using a credit card wisely and repaying on time will ensure that you build a reputation with the credit bureau as a financially responsible person.
2. Safest Way to Handle Money
Credit cards still get the gold as being the safest way to handle money. If your card is lost or stolen, it can quickly be canceled and your bank is always alert to suspicious activity.
Many credit cards provide zero liability for fraudulent activity, so if ever you are a victim of such injustice, it can be swiftly reversed with little to no stress.
3. Insurance Coverage
In a similar vein, most credit cards come with a variety of consumer coverage. Travel and rental car insurance are common advantages of credit cards. Even product insurance for items bought with the card often exceeds the manufacturer’s warranty.
So, using your card to purchase the right item or experience can prove to be wiser than purchasing it with cash or a debit card.
4. Credit Card Rewards
When choosing the best credit card for you, something worth researching is the kind of perks and rewards it offers, as they can vary greatly. Reward points may be used for experiences such as restaurants, groceries, or the all-famous travel rewards like the td aeroplan visa infinite. Even bonuses and offers occur throughout the year such as interest-free days.
Depending on your lifestyle, choosing an appropriate reward system might save you time and money in countless aspects of your life.
5. Cash Back
A reward that deserves its own section, though, is cash back. To explain it simply, you are literally paid for spending. For instance, if your credit card provides 2% cash back, you will be rewarded $2 for every $100 that you spend on your card.
Again, cash back with credit card rates vary so it’s worth doing your homework to find the rate that suits your purchasing habits.
The Undeniable Benefits of Credit Cards
We’ve only begun to scratch the surface of the many benefits of credit cards. As you can see, when used responsibly, credit cards are not only convenient, they actually help you to grow financially. So, rise above the horror stories and make the most of credit cards to improve your quality of life.
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