Thinking about getting a credit card? If so, there are a lot of benefits to having a credit card. Many of them will be covered here in this article. Others you will be able to find on this website and others on the Internet. There really are a lot of advantages to using a credit card, so please take the time to read how you can use credit cards to help you in many ways.
The vast majority of households in the United States have at least one credit card of some type. We are talking over 75% here. To some the reasons may be clear but to others they are lost on this subject. Hopefully Plastic Dollars will be able to help you understand why there are so many benefits and why it is so clear to the smart ones that use credit cards for rewards.
Types Of Credit Card Users
Simply put, credit cards give even the average individual numerous advantages over other methods of traditional payment. However, there is a danger of going crazing and spending outside your limit or monthly budget with a credit card. When this happens a person can run up huge interest charges. These types of cardholders get themselves into major trouble and usually cannot pay off their credit card balance.
Then we have the type of cardholders who use their credit cards very wisely. The wise ones pay off their credit card balance every month to take advantage of the points and extra cash that are offered through their credit card company. These are the cardholders that can reap major benefits. PlasticDollars.com recommends that you be the wise cardholder to make money with a credit card instead of it being a liability to you.
Credit Cards Are Convenient
Without a doubt, one of the biggest advantages of using a credit card is their convenience. If you have a major credit card on you, do not have to have cash. There is no more counting change to a cashier or write a check in a hurry. In fact, if you write a check these days, you will get funny looks from people that carry plastic in their wallets. Credit cards are just way more convenient than the outdated traditional forms of payment.
Using Credit Cards Can Help In Monthly Budgeting
A credit card can be used to help someone budget expenses each month. This is based entirely upon the premise that provided you pay your bill off in full each and every month. If a person does pay their bill off every month, they will have a master bill that shows an itemized list of what all of the money was spent on for the month. Some credit cards categorize your monthly purchases. They will send summaries of your spending that give you breakdowns of how much you spent on certain categories. Not all of credit card companies do this. Also to get these figures you may have to sign up for an online account (which I highly suggest). These reports can usually be imported or exported in any type of format you may choose. This works well if you are using a certain type of financial software to track all of your expenses.
Debit Cards Have Many Advantages Over Debit Cards
Credit cards even have benefits that debit cards do not. You know, debit cards, or as some call them “Fake Credit Cards”. Debit cards used to be the way I paid for everything. Not now. Debit cards are now my backup plan. They are the other form of plastic that I carry and I only use them when necessary.
Debit cards are very similar to credit cards but they do not include ALL of the benefits of a credit card. Most debit cards are linked to your checking account and this can be problematic because sometimes they may have twenty-four hour charging limits. These limits could prevent a person from buying something that they had in mind.
Debit cards can even perform like credit cards if items are purchased as credit instead of the normal way of using a debit card by entering a PIN number. Your bank usually covers the difference between the balance in your account and the amount of the purchase.
In this case, the bank acts as a creditor for the purchase and you can get bombarded with huge insufficient fund fees by the acting bank. There are alternatives though. One way around the normal debit card (that is connected to a checking account) is to purchase a prepaid debit card. These cards are already loaded with the funds you need and can keep you spending too much. These cards are good for people that cannot control their spending habits.
You Should Use A Credit Card Responsibly
How you use a credit card is directly and indirectly related to your credit score. A credit report is pretty much a report card for people that borrow money. Your credit history is always available for companies and /or banks, which are in the lending industry to review.
Your credit score shows just how worthy you are seen or considered by people in the lending biz. Credit reports will show whether you pay your bills and if you actually pay them on time. If a person abuses a credit card it will in turn produce bad credit score. A bad or low credit score can prevent you from being able to obtain a loan because lenders will see you as a bad bet for their money and they do not want to get burned. A low credit score can also prevent you from being able to obtain future loans. And here is the kicker, having a low credit score can also cost you more money in the long run because banks and other lenders will charge a higher interest rate because you are a higher risk for a loan.
Use The Strength Of The Credit Card Companies To Protect Yourself
Credit card companies are huge corporations with a lot of power. You may think that you are just using a piece of plastic but in reality you have a power company and industry behind your purchases. Making a nice sized purchase with a credit card gives you a better purchase protection that you will not get if you pay with cold hard cash or some the fake credit cards (ATM cards).
Most credit cards can even extend your product warranty. If a retailer does not deliver the items you purchased, the credit card company can step in for you to assist in the matter. One little fact that people overlook and you should never for get this fact. The money you use to purchase an item with a credit card comes directly from the issuer. So it’s in their best interest to have your back.
Lastly, when you make a purchase with a credit card, you automatically are given a certain amount of theft protection. It can happen to anyone so make sure to alert your credit card company if your credit card is lost or stolen. Credit card companies labor earnestly to resolve theft issues on your behalf. Remember, you are a cash cow for them. You charge with a credit card and they get a certain percentage from the retailers. If your card is stolen, you will usually only be responsible for paying back a small amont like the first $50 of what was spent by the theft. This can save a person a huge amount if a credit card thief charges a lot on your card.
It’s even possible that you will not have to pay any back. It depends on your credit card issuer. It’s very important that you if you report a stolen card and any charges made on it immediately. The majority of credit card companies offer a policy with a zero liability. This means that you may not have to pay a dime for any unauthorized purchases made with your stolen credit card.
Register Online To Monitor Your Credit Card Usage
I highly suggest that everyone using a credit card register online so you will be able to detect any fraudulent activity on your credit cards. You don’t have to wait until your statement shows up to notice this type of activity. This is just one of the many benefits of having an online account.
There are lots of reasons to use a credit card instead of other traditional forms of payment. You just have to take advantage of the benefits. Just remember to use a credit card to your benefit and don’t let a credit card be used as a liability. Always pay the balance off in full each month and you will make real money with credit cards.
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