The Advantages of Using Credit Cards [Updated 2019]

By: Yara Pollard

Gone are the days of barter and using physical cash. A step forward in innovation gave birth to what is called the credit card. Over the years, the use of credit cards have become more prevalent. 

In fact, according to Experian, a typical American consumer has four credit cards. That’s just even scratching the surface. We have an all-time high in national credit card debt that now exceeds $1 trillion according to the Federal Reserve.

Here are more statistics about American credit card users: 

  • 51% of Americans that can use credit have 2 credit cards.
  • 14% of Americans have over 10 credit cards.

There are dangers with overusing credit cards and we’ve all heard one or more stories about how their lives got ruined because of having too much credit. But with proper discipline and financial education, credit cards can be powerful financial tools that you can take advantage of.

Here are the advantages of using credit cards:

Boost in Purchasing Power

It’s now always that a lot of us can afford major or expensive purchases or payments. Even when we can, paying the full amount on the spot can hurt our budget. Making one big full payment can either be not an option or one that’s not ideal to make.

With a credit card, you can have the option of making installment payments per month. This way, a big ticket purchase can be afforded. In fact, with a credit card, you don’t have to bring cash. 

Purchases can be made 100% through credit. Purchases can also be made through part cash and part credit. 

Rewards

Another benefit of using credit cards are rewards. Rewards are great incentives for everyone to make use of their credit cards. Most companies offer rewards for their cards and these rewards can come in different forms.

Credit card rewards can either be:

  • Reward points
  • Discounts
  • Cash advance
  • Frequent flyer miles
  • More other benefits

A great example for this is the Best Buy credit card. Best Buy is one of the best retail stores for electric items and if you’re a Best Buy shopper, you could find how ideal it can be to have a Best Buy credit card.

With a Best Buy credit card, users can gain rewards points which they can use for refunds, discounts and depending on the type of card, one can even make use of cash advance. These are the different types of Best Buy credit cards. They are:

  1. Best Buy Visa Cards (Platinum and Gold)
  2. Best Buy Standard Cards

One can use Best Buy Visa Cards anywhere that accepts Visa cards. The most prestigious cards amongst all is the My Best Buy Visa Platinum credit card. It has 0 costs but just those with at least 725 credit score can apply for it. 

My Best Buy Gold visa card functions the same way as platinum but costs $59 per year. Those who can apply for this type of card are those who do not meet the minimum credit score mark but still has good credit scores. 

Meanwhile, Best Buy standard cards can just be used on Best Buy stores. According to Future Fuel, these are the additional features of having a Best Buy credit card:

  1. Free shipping on everything all season long for online purchases.
  2. Access to Best Buy sales and offers.
  3. Support from Geek Squad which is a company that offers 24/7 customer support. 

A Walmart credit card almost has the same fashion as Best Buy’s though Walmart uses Mastercard for theirs. With a Walmart credit card, you can have as much as a 5% cashback on all purchases done via Walmart’s website.

If you’re a frequent shopper of Best Buy and or Walmart, avail their reward cards to take advantage of the benefits you can enjoy by shopping on credit. 

Convenience and Security

Making use of a credit card can save you the hassle of having to bring a lump of money. If you’re on travel, need to make a purchase or payment or when there’s an emergency, it’s troublesome just to have cash and worse if you don’t have enough of it.

Another issue with just having cash is security. If for some reason, someone steals or you lost your money, there can be no way of getting them back. With credit cards, your money can still be safe.

All transactions are also traceable. If you happen to lose your credit card, you can inform the bank and they can freeze your account for you. Even if someone else tries to use your credit card, they will still need your pin for them to make use of it. 

You also won’t have to carry or flash around a tempting fat wallet. Credit cards are easy to bring and make payments more convenient and possible. Perhaps this is why according to the Federal Reserve, 83% of Americans possess at least one credit card. 

Build Good Credit History

In America, the creditworthiness of an individual depends on their credit history. Having a high credit score can give an individual better credit options such as better credit card deals, better car insurance rates, landing a job and more. 

Having a good credit score means having at least a credit score of 690. According to Nerdwallet, here’s what credit score means:

  1. 300-629 = Bad
  2. 630-689 = Fair
  3. 690-719 = Good
  4. 720-850 = Excellent

There are different strategies on how you can improve your credit score. If you want to build a good credit history, you need to be on-time with your payments. The amount of credits used also matters. 

According to Nerdwallet, a good strategy is keeping your credit balance below 30% of your total credit limit. Another is having a good credit mix. Having a good credit mix shows that you know how to handle your credit in a responsible manner.

Last but not the least, the amount of time you’ve been using your credit card is also one of the determinants of your credit score. This is why it’s important for you to get a credit card early on and learn how to be responsible with your credit.

This way, time can be your ally in building up your credit score. If you still haven’t gotten yourself a credit card and you’re still wondering if you should get yourself one, know that these benefits can be available for you just through having one. 

Credit cards are useful and powerful financial tools. Equip yourself with the knowledge and skills on how to use them well and credit cards can be a game changer. As what Robert Kiyosaki said:

“Don’t cut up your credit cards, the problem is not the cards, it’s the lack of financial literacy of the person holding the cards.” Start building up your credit history with your credit cards today. 

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