The use of credit cards has become global since it was first made available to the general public. In fact, according to Statistic Brain, 78% of Americans have credit cards. That’s most of the US citizens having at least one of the powerful financial tool.
There are good reasons for this as the advantages of using credit cards cover a lot more than just mere borrowing of money. If you’re among the younger population or you’re still deciding if you should get a credit card, we’ll tell you everything you need to know about the topic.
Most people have and use credit cards for a reason. While you can argue that using credit cards is safe, you might be surprised to know how safer it can be to use credit cards instead of cash and debit cards.
There are different types of credit cards. Some of these cards are:
Regardless, applying for credit cards have certain requirements and all types of credit cards help you build your credit score. You might be familiar with credit score but there are a lot of credit score misconceptions that you need to be aware of.
These false beliefs can ruin your credit standing. Here’s why most people are using credit cards and why you should as well:
It can take some years for you to build a good credit history. By having and using a credit card earlier on, it can be easier for you to achieve a good credit score. As mentioned earlier, the benefits of credit cards go beyond lending.
With a good credit score, here are some of the benefits you can enjoy according to the balance:
Know that there are 5 factors that determine your credit score. They are:
By knowing these 5 factors, you can have a better idea on how to improve your credit score.
Before credit cards, people still had to bring with them a huge amount of money to make a major purchase or when they went out to eat at an expensive restaurant. In fact, credit cards were born out of a need by rich people so they won’t have to carry with them a huge amount of cash when they went out to eat at a luxurious restaurant.
Credit cards make it easier for us to have and bring digital money. Moreover, it’s much safer than still having to bring a lot of cash. If something unfortunate happens and you lose the money you have with you, you might never be able to get it back.
However, with credit cards, there are laws that protect you if there’s fraudulent use of your credit card. If you get into this kind of situation, be sure to report to your bank as soon as possible.
Depending on the type of credit card you are using, you can earn reward points. These reward points can be exchanged to free flights, products or cash back depending on the bank’s reward programs.
Moreover, a lot of stores now are offering their own reward cards such as Walmart and Target. Before you can apply for such cards though, you need to build your credit score. This is another reason why you have to get a credit card earlier on.
If you love to travel, a credit card can serve you better than fiat money as credit cards work in different currencies. With almost wherever you go, credit cards are accepted. This means that you won’t have to worry about not having enough cash when you are on travel.
You also don’t have to bring a lot of cash nor hassle yourself with exchanging them to foreign currency.
If there’s a sudden emergency and even your savings is not enough, you can use a credit card to pay for unexpected costs. According to CNN Money, 40% of Americans are not prepared for a $400 emergency expense.
Having a credit card protects you from sudden expenses but you are still to pay everything that you owe. It’s important to be responsible with using a credit card. Otherwise, you can end up paying a lot more than you should have because of interest.
If you know anyone or if you’re surrounded by people discouraging you to get a credit card, you need to think for yourself. As 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 and always make the best out of a bad situation.”
If you don’t have a credit card yet, decide to apply for one today.