5 reasons why you should use a credit card

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5 reasons why you should use a credit card



Often, people lose their confidence over credit cards. The reasons can be anything. May be it’s because of the bait-and-switch schemes and ambiguity that penetrated the industry before and during the Great Recession. Perhaps it’s the potential for overleveraging that many unsecured credit cards provide. Maybe it’s simply the fact that many of us want a scapegoat for financial difficulties. Whatever the reason – and these are all perfectly understandable – a credit card remains a very valuable tool for the vast majority of consumers. Don’t believe me? Well, let’s take a look at five of the biggest reasons why you should use a credit card.

1) The New Credit Card Law – The Credit CARD Act of 2009 dramatically improved the credit card industry by instituting new rules requiring greater transparency from issuers and significantly strengthening the consumer credit card bill of rights.

2) Rewards – Do you get any rewards or perks when you buy something with cash? No, but you do with a credit card. Cash back credit cards, travel rewards credit cards, gas credit cards and more allow you to save and/or earn points or miles that can be redeemed for free goods and services every time you use your card. The best deals even give you hundreds of dollars essentially for just signing up.

3) Credit Building – Use of a credit card is the easiest way to build or rebuild credit because information about your usage gets reported to the major credit bureaus on a monthly basis. Therefore, it’s easy to add a lot of positive information about your fiscal consumption over a relatively brief period of time. You don’t even need to actually use your credit card to build credit because you are viewed as being a responsible consumer if you simply maintain your card in good standing and at zero balance. Having a good credit score is integral to one day getting a home loan, leasing a car, lowering your car insurance premium, renting an apartment or even landing certain jobs.

4) Best Exchange Rates – Credit cards automatically provide the best exchange rates for international travelers, according to a Card Hub study. More specifically, credit cards with no foreign transaction fees can save you up to 15% compared to cash conversion services offered by major banks or airport currency exchange companies.

5) Convenience – No one wants to always walk around with all the cash they might need. Doing so would simply be both burdensome and dangerous because if you lose cash, your money’s gone. Credit cards are less cumbersome than cash and have $0 liability guarantees, which means you won’t be liable for any unauthorized purchases if your card is lost or stolen.

As long as you don’t allow use of plastic to lead to increased spending and you pay your monthly bill in full whenever possible, credit cards can obviously be quite beneficial. So, whether you’re now a full-fledged credit card convert or not, you at least have to admit that there’s a lot of value in using one.


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