If you’ve never used a credit card before, you probably have your reservations. Chances are, you know someone who is in credit card debt or has a bad credit rating that they can’t shake off.
And it is quite intimidating. The thought of using money that isn’t yours, that you’ll have to pay back each and every month, that might just “get out of control”… However, if you’re careful with your credit card, you will not let it “get out of control”. It is good that you have your trepidation. That will keep you from making reckless decisions.
The question you may be asking is why use a credit card in the first place. You can avoid all possible drama by simply not using credit, but then you’ll be missing out on all the perks described below.
So, without further ado, here are 5 good reasons to use a credit card.
1. The world works on credit
If you think you can avoid credit by not getting a credit card, you’re going to be sorely disappointed. The world runs on credit. Obviously, businesses need credit to get started and make profits. But it is necessary in your personal life too. In order to buy a house or car, you need credit. You could technically wait until you’ve earned enough money, but by then, you probably won’t need to worry about debt!
Where does a credit card fit in? Well…
2. It gives you a credit score
You can’t get credit until you’ve proven you can handle credit. Banks check your credit record before giving you any sort of loan, and if you don’t have one, you will not qualify. But how do you get a credit score if you’re not allowed to get credit without one? Credit cards differ from other types of credit in that you can get one based on your earnings alone. In other words, you don’t need a credit score. And if you use your credit card, and pay the monthly installments, you will get a credit score that opens up possibilities in the future.
3. Bonuses
This isn’t going to be your first priority when considering getting a credit card, but it should not be ignored. Banks benefit from you using credit, and therefore they make credit cards as attractive as possible by offering bonuses that actually make a difference to your life. You’ll need to compare credit cards to decide which has the bonuses that best suit you, whether they are air miles, cash back rewards et al.
4. Internet purchases
You can’t get away from online shopping. More and more products are being sold online. Amazon just acquired Whole Foods – they know that the best place to buy groceries will eventually be online. A credit card opens up online shopping for you, and is easier and cheaper than using PayPal for example.
5. It’s great for traveling
The days of using foreign exchange outlets at the airport are over. Generally, you’re able to spend using your credit card no matter where in the world are you. Of course, at markets and the like you will need cash, but the cheapest way to spend abroad is on your credit card.
