There’s Nothing Wrong With a Credit Card if Used Correctly

Credit cards may have had a bad reputation in the past, giving off the impression that by using one, you don’t have the money to make the purchase.  I suppose that could be true for some, which is why those could end up on a long and hard road down the path of debt, but if handled responsibly, credit cards can actually provide much more positive financial impact compared to using cash, or even a debit card.  It can actually be argued that not only are credit cards ok to use but can be swiped for every purchase you make.

Builds Up Credit

When it comes to a mortgage, loan, credit card, even a potential job you land, your credit score is sort of the first, and lasting, impression on a lender, and can not only decide the fate of your application approval, but at which interest rate you would be paying on going forward.  The higher the credit score, the better interest rate on the market that you can advantage of, so it’s important to make on-time payments and paying off your statement balance every month so you can continue to watch your score rise every month (you can now view your score on monthly credit card statements).

Better Fraud Protection

While you can certainly still dispute charges on a debit card, but the difference is between a debit and credit, is that if you have fraudulent charges on your debit, that means the money has been taken from your account and will remain missing until you’re able to get it back from the bank, however long that takes.  With a credit card you can dispute and the charges will stay pending until resolved, and you will not be responsible by the time you need to make your next payment.

Rewards Add Up Fast

The best reason to use a credit card and why it can actually be recommended to be used for every purchase is because of the rewards.  If you just think about the purchases that you were going to make anyways, you can earn hundreds of free dollars a year in points or even cashback, just by using your card instead of debit, cash, or another credit card.  That is a significant amount of money that you could be leaving on the table that could otherwise have gone towards your emergency fund, paying down debt, retirement, or splurging on yourself.

Extra Perks You May Not Know About

It’s a good idea to read the fine print about all that is included with your credit card, otherwise you might miss out on plenty of money saving applications.  For one, when you check in for your rental car, you can decline rental coverage and rely on your credit card if any damages occur (provided you have coverage and you use the card, of course).  Also, look out for any balance transfer options that you can take advantage of at a low promo rate if you are looking to move and pay off debt from another card a lot faster.

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