There are many benefits of credit cards if used wisely. For those of you who have a credit card, it is important to consider how you use a credit card properly. For example, paying bills on time and not using credit cards for things that are not important.
Why use a credit card? Other payment options, such as a debit card may be better to fit your budget. However, there are several advantages of credit cards that debit cards do not have.
The following are some of the benefits of credit cards that you need to know:
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List Benefits of Credit Card
1. Help in an Emergency
One of the benefits of a credit card is that it helps in emergencies or unplanned expenses. If you have a credit card, you always have borrowed funds to use at any time.
You can’t do this on a debit card. Debit cards only hold your own money, so you can’t withdraw more than the amount you have in your debit card.
2. Build Credit Score
A credit score, which is taken from a record of your financial activity, is very important if you plan to borrow money. This score comes in part from your credit card history. In contrast to debit card use, credit card use is reported to a bureau that monitors scores.
A track record of paying credit card bills on time and never being late is great for improving your credit score. If you have a good credit score, it will be easier for you to apply for a loan.
3. Easier to Track Expenses
Using a credit card can make managing your finances more convenient than using other payment methods. Your credit card sends a report each month detailing exactly when, where, and how much you spent on each purchase using your credit card.
You can use this information to track your expenses. In addition, some credit cards also offer a year-end report that summarizes your expenses throughout the year. This is very useful for you both for tax and other tracking purposes.
4. Credit Card Rewards
Usually credit cards offer a reward program. Credit cards provide various attractive prizes ranging from vouchers, points, cashback, and so on. However, the rewards you earn and the types of purchases you earn may vary by credit card.
For example, you can earn one point for every purchase you make using a credit card. Depending on the card issuer, you may be able to exchange your rewards for gift cards, cash, or even travel vouchers. It should also be noted that the rewards given by this credit card generally have a certain period of time. Therefore, it is better if you get a reward from a credit card, use it immediately.
5. Security and Purchase Protection
Almost all credit cards offer protection against credit card fraud. If someone steals your card (or card number) and makes a purchase, you will be reimbursed and not required to pay for the stolen purchase. That’s one of the advantages of a credit card that you can get.
Although there are many benefits of credit cards but you also have to consider the disadvantages of credit cards. Use your credit card wisely, appropriately, and not excessively.
This is the information from the investmoneysaving.com website that can be provided. Thank you for reading this article. Don’t forget to share this article with your friends or relatives so that more people know the various benefits of credit cards. See you in the next article.