Depending on your experiences and your upbringing, you might have one of two very different opinions about the use of credit cards. To some people, credit cards are just an easy way to get yourself into debt that you’re then trapped under for the rest of your lives. While they allow you to buy things, you’re likely using them to buy things that you can’t afford and that you don’t really need. To other people, credit cards are the means for getting the necessities while also taking advantage of some very big financial benefits. So to show you how you can be more of the second opinion than the first, here are three big benefits that come from making purchases with credit cards over using cash or debit cards.
When you have money, there’s always a chance that that money could somehow fall into the wrong hands or be used in a way that you didn’t intend. If this happens to cash you have on-hand on through the use of your bank account, there’s really no way for you to get that money back. It’s been used and now it’s gone, even though it wasn’t necessarily you that used it. But with credit cards, Amy Fontinelle, a contributor to Investopedia.com, shares that there’s more safety when it comes to fraud. If your card is used in a fraudulent way, you can simply inform your company of these false charges and have them taken from your account.
Build Your Credit Score
Like was mentioned above, many people are afraid of using credit cards because they think that they’ll eventually ruin their credit. However, if you use credit cards correctly, Latoya Irby, a contributor to The Balance, shares that credit cards can actually work wonders for building your credit. By proving that you’re a good credit risk through keeping your balances low and paying your credit card bills on time each month, you can slowly but surely build your credit score. With a high credit score, you’ll find it easier to accomplish a lot of other financial tasks, like getting a quality home or car loan and applying for other lines of credit in the future.
In addition to credit cards allowing you to make the purchases you need even if you don’t necessarily have cash on hand at the moment, MoneySupermarket.com shares that you can also earn some great rewards through using your credit card. Rewards such as getting cash back, earning travel miles, and accumulating loyalty points can all make it easier for you to reach your financial or personal goals all because you spent money on your credit card that you would have had to spend anyway.
If you’re skeptical about using a credit card, consider the information mentioned above to learn how credit cards can be beneficial to you when used appropriately.