Credit cards and their place in our consumer-based society are met with a love/hate relationship. Millions carry heavy credit card debt for reasons including irresponsible spending, health & career setbacks, and unforeseen expenses. It’s led many to demonize the credit industry by way of spreading FUD, (fear, uncertainty, and doubt).
Ask a friend or family member what they think of credit cards and you’ll likely hear, “They’re terrible!”, “Don’t do it!”, or “I don’t trust ’em, I rather pay cash!”. To each their own… but they’re missing out on great benefits. Let’s dispell the FUD and see why carrying credit cards are a smart, rational thing to do.
6 Smart and Beneficial Reasons to Carry Credit Cards
Whether you had a flurry of credit card offers when you turned 18. Or, found yourself using them on your own accord. Here are some of the great benefits of having them on-hand:
- Building financial literacy
You can read blogs/books or watch videos about finance to wrap your head around the topic. Or, get involved and learn by doing. The latter tends to help many understand and respect finances. It adds responsibility to their spending ultimately improving other areas like budgeting.
- Building a credit profile
Credit history plays an important role in determining credit scores (35% of it, in fact). The sooner you can get, and manage, one the better. Else, you’ll find yourself constantly resetting the clock, pulling your average credit history down with it.
- Start earning rewards
Credit cards come with several reward systems:
- Frequent flyer miles
- Sign-up bonuses
These rewards are automatic or activated when logged into their portal with qualifying cards. It’s essentially free money if you’re responsible and pays what’s owed — in full — on time each month.
You could take it one further by keeping up-to-date with the latest rewards to capitalize on bonus offers and promotions. CreditShout offers forums and a newsletter condensing this information. Else, bookmark credit card homepages and regularly check-in to see the latest deals.
- Backup, backup fund
We all know the importance of an emergency fund for covering expenses when times are though. Credit cards can act this way as a backup to your backup funds. It’s not ideal but the opportunity is there when you’re in a tight spot like sudden car troubles or medical emergencies.
- Buyer protection
You don’t mess with credit card companies — they’ll come after you, quick! This goes for scummy sellers, too.
The credit card companies have your best interest in mind and offer extensive consumer fraud protection. Crystal does this to hedge her loss in the event her debit card was stolen. Using a credit card can also extend product warranty beyond what’s offered by the manufacturer.
In the event of consumer fraud, you can do a chargeback to get your money back faster. This is compared to going through a long process conducted by your bank or third-party service.
A charge to your debit card immediately pulls the funds. A credit card provides a typical month to pay the balance giving you some leeway if you absolutely need the product or service. Credit cards also have an extra grace period. This is usually 21-days after the bill.
It’s best to pay it when the bill comes in but the reality is many are forced to stretch finances to the last moment to get by. At least that option is available versus going completely under.
You See? Credit Cards Aren’t so Bad
More power to those able to get by paying with cash. But, the real benefits lie in credit cards. Their rewards, credit building, protection, and flexibility make them worth holding. Just remember to use them responsibly!
Have anything to add to the benefits? Leave a comment.
FYI: I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year. I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home. If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!). Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!