You may think that having a credit card is the same as getting into debt, but if you're financially responsible and not overspending then using a credit card can actually be beneficial by saving you money. In turn, this will help grow your wallet on its path to financial greatness! There are many people that are concerned with the bad reputation of having a credit card as everyone knows someone who incurred extra charges and accrued a great deal of interest. While this bad credit pathway can be a reality for some individuals and has led them down the path to a bad credit score, those who are financially responsible can use their credit card as a great opportunity to save money and grow their financial future! The fact is that if you are approved for an unsecured credit card, this can help establish positive spending habits.
Responsible credit card users can take advantage by using their cards wisely, while those who aren't so good at keeping track may find themselves in over their head quickly. If you or someone you know has gone down this pathway, you can fix your credit. The first bit of guidance that you may want to take advantage of is to attempt to get a new credit card with the specification of no interest for a specified time frame. Roll your credit card debt that you have accrued onto the new card. This will buy you time to earn money to pay off the debt without incurring unnecessary charges. If you are unable to take advantage of this strategy, stop spending on the credit card and slowly pay down the debt. Every time you make a payment in a timely fashion, you will be boosting your credit score. It is a reality in today’s world that in order to get a car loan/ mortgage, you will need to be viewed as a responsible spender by the financial institution that is offering you the funds. If you do not establish yourself as financially responsible, you will only be able to purchase large ticket items with the money that is in your bank account. Most individuals do not have money to pay for a house with cash. This is the reason that establishing credit or fixing bad credit is essential. If you have no credit history, you may find that it is difficult to get approved for a credit card. In this case, many banks offer low limit credit cards that are covered by the money in your checking account. This will allow you to begin to establish a credit history and to get approved for a credit card that has more advantages for you.
In addition to having a better credit score and being able to establish loans/ mortgages, credit card companies offer you incentives to use their cards. Each card offers its own unique reward system. Some cards offer points. After earning a certain amount of points, you are able to get cash back. Other cards allow you to use your points towards travel making your hotel or airline accommodations at a reduced price or free based off of the spending that you placed on your card. Some cards even offer you a one time bonus. For example, if you spend $5,000 in the first 3 months using their card, they may give you a one time payout of $500. If you were planning on spending this money anyway, this is a great opportunity. You can easily pay your monthly bills using your credit card to help you to meet the requirements to meet the value of the bonus.
In addition to the rewards, credit cards are a much safer way to spend than cash. If you happen to drop a $100 bill outside, it’s very likely that you will not see this bill again. If you lose a credit card, you are able to cancel your credit card at any time. If you notice fraudulent charges on your card, your credit card company will likely cancel payment and reverse the billing. This offers peace of mind when paying. Also, if you purchase a big ticket item and the vendor unfairly charges you incorrectly, you could dispute the charge. It is more likely that a vendor will back down from the credit card company as its resources are endless as opposed to you as an individual. This offers you a sense of security when purchasing.
Having a credit card offers a delay in payment time. Instead of having the money in your bank account at the time of purchase, you are given a grace period to pay off the expenditure at a later time. This may be a few weeks until your credit card bill is due, or you could use the pre-agreed upon interest-free period. This timeline may be as short as 30 days or could extend up to two years before the charge on an account is assessed. It’s modern day “layaway”. This means that there's no fee for borrowing and building up your balance if it suits you better!
Good luck on your credit card journey. Make wise decisions and you will benefit yourself!