Look to the Good in Credit Cards

Now for those that may be in credit card debt and could be wondering what does ira stand for, probably could have a few negative comments about using a credit card, but if used responsibly they can actually make sound financial sense.  A few things to look for in a solid credit card would be the interest rate, no annual fee, and the rewards that come along with it.  If you can keep spending under control, there actually is plenty to see the good in using a credit card.

A Nice Grace Period to Pay Back

It can be nice to track all of your purchases with one card and be able to pay everything the next month.  The part where discipline comes in is that you need to only spend what you can afford to pay back by the statement due date, otherwise if you carry a balance over to the next month you will begin to be charged interest, and depending on the card, could be upwards of 16%, which also depending on the balance, can really start to make monthly payments start to rise, while the payment is likely to hardly chip away at the balance, making it longer to pay off later on.

Can Earn Free Money

Probably the best reason to use a credit card is the rewards you can earn, whether they come in the form of points that you can redeem for gift cards, hotel or airline miles, or just straight cashback.  By making the purchases you would normally be making anyways you can earn these rewards that avoiding would be leaving free money on the table, so it could be argued that every purchase should be made with a credit card as long as you can stay within your spending budget.  As you start to see the rewards add up it can be easy to want to charge more, but if you’re unable to payoff the balance, the interest will be a lot higher than what you would earn in rewards.

Builds Up Credit

By making on-time payments and paying off every month you can establish a solid payment history that will build your credit over time.  Missing a payment could cost you a late fee and a boost in interest rate, but it’s when you go thirty days past due is when your credit report will take a hit and could take up to seven years to come off, so it’s important to continue to make your payments on time every month, even auto-scheduling payments if it helps you remember.

Protects Your Money

With so much fraud going on these days you never know when your info will be taken, and you’d rather it be a credit card instead of a debit card.  While sure you can dispute the charges on your debit card, but who knows how long it will take to come back into your account, and in the meantime, you’re left with a wiped-out bank account.  With a credit card they can stay in pending and you will not have to worry about being charged.

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