Credit cards are often villainized. Some say they’re a gateway to debt. In a lot of cases, this is true. For instance, buying with a credit card is so hassle-free that it can lead to overspending. And when it’s time for repayment, some credit card owners forget or only pay the minimum fees because they don’t have enough due to overspending.
But owning a credit card isn’t that bad. It can be helpful in many situations. And as long as you use your credit cards responsibly, you won’t sink into credit card debt. Here are some benefits of owning a credit card that can justify getting one:
Be Ready for Emergency Expenses
A credit card can be beneficial in an emergency or if an unplanned expense arises. For example, maybe you have a sudden need to buy medicines or have hospital bills to pay. If you don’t have enough cash on hand, you can use your credit card to pay for the out-of-pocket medical expenses.
This does come with a risk, though. This emergency expense may still result in credit card debt if you don’t have enough money to pay when your balance is due. In this case, it’s best for you to pick a credit card that offers 0 percent interest and a long period of payment.
Build Your Credit
Having a good credit score is essential. It can help you successfully get loans to buy properties, such as a home or a car. But building credit will take some time. One way to do it is by having a credit card. It’s one of the easiest ways to get a credit account and build your credit history.
Of course, this is possible as long as you manage your credit card well. You need to pay your monthly bills on time religiously. You also shouldn’t spend more than 30% of your limit to demonstrate that you’re a responsible person who will only borrow money that you can pay.
Many credit cards come with perks that you can take advantage of, such as cashback and reward points. These are often offered in food and gas purchases. Usually, when you reach a certain amount of purchase in an establishment, you get some of your money back. And you can use it the next time you buy something from that same store.
These perks are often taken for granted by credit cardholders. But if you take advantage of these perks, having a credit card will certainly benefit you and save you some cash in the long run.
If you have payments that occur regularly, you can use your credit card to make automated payments. For example, your utility bills need to be paid monthly. And missing a month or two may get you in trouble. You can use your credit card to automate payments for utilities and no longer worry about forgetting to pay for them.
Some credit card companies charge annual fees. But sometimes, they have promotions where annual fees will be waived if you use your card to spend a certain amount each year. Your automated payments can count, so you can avoid paying the fee.
Tracking expenses is an integral part of budget planning and saving money. If you know where your money goes, you can assess your spending to determine which ones to reduce or eliminate completely.
Buying things using credit cards can help you track your expenses easily. For example, you can check your purchases through a mobile app or your banking account.
Minimize COVID-19 Risk
When the pandemic started, everyone had to make certain changes in their lives to keep themselves safe. As for businesses, they decided to go cashless. One study found that the novel coronavirus can stay for up to 28 days on banknotes. This startling discovery prompted many business owners to only accept touchless payments, such as mobile money transfers and credit cards. Thus, having a credit card during the pandemic can keep you safe.
Credit cards are convenient to have. When you go out, you don’t have to worry about running out of cash. Also, carrying a lot of money can make you feel unsafe or burdened. So having a credit card can relieve you of those issues.
As with many things, a credit card has both pros and cons. But many people often only highlight the cons and imply that people should avoid credit cards. The truth is that having a credit card isn’t bad and actually comes with benefits. As long as you use it responsibly, you won’t have problems.