Why You Shouldn’t Be Afraid of Using a Credit Card

Credit card debt is certainly something that can scare you off, especially if you had bouts with it in the past.  It can cause hardship and stress trying to figure out not only how you got into that mess, but how you are going to pay it back.  It certainly does take patience and discipline to handle a credit card, but if you can keep spending under control and pay back the statement balance every month, there are certainly ways you don’t have to be afraid of using plastic instead of cash or debit going forward.

Can Build Up Your Credit

No matter if it’s buying a home, getting a car loan, even securing monthly payments to pay back the full cost of a cell phone is decided based on your credit score.  The higher your score, the more favorable terms or interest rates you have available to you.  I would say it’s as simple as that, and it is, but that means a few things. First, payments must be made on time, while second, the credit utilization needs to remain low, and third, applications are to be kept at a minimum.  Do all three of those and you should see your score continue to rise each month.

The Rewards Add Up

The best reason to use a credit card, even one that can be argued for every purchase, is based on the rewards.  By even making the purchases you were going to make anyways, by using a credit card you can earn points, airline miles, or even cashback, that otherwise you’d be leaving on the table.  If you can keep spending under control even if you see the rewards balance start to add up, you can still pile up hundreds of dollars a year in free money.

Great Way to Track Spending

Simplifying your finances as much as you can is the best way to not only stay on top, but see where improvement can be made.  By using a credit card for purchases, you can see all of your spending on one statement, avoiding cash or debit purchases, and easy enough to go line by line and see where every dollar went.  As you start to eliminate unnecessary spending, for fun, you can see how many charges throughout the month could have been avoided, so that way going forward charges can be put under a microscope more often with the hopes that spending will go down and you’ll see a little more in your account every month.

Helps the Safety of Your Finances

While you can certainly use a debit card or cash for every purchase, but what about those charges with your debit when fraud occurs and your information falls into the wrong hands. Within seconds, charges can be made to your account, and with a debit, they will come out of your checking account.  Sure, you may get those back with a dispute eventually, but the funds are already gone, and with a credit card, they can be placed in ‘pending’ status until the dispute is resolved.

Speak Your Mind