There are very few of us out there that do not have a credit card, At the end of 20016 there were 300 million cards in circulation. Despite the bad press and constant barrage about debt from every media outlet, credit cards are still popular, simply because they do have advantages for personal finances (if used correctly and rarely of course).
Here are ten reasons why having a credit card in your purse or wallet is an advantage and not a disaster waiting to happen…
- Convenient: I think we all know how much of a hassle it is when we see something we really want to buy, but have to pop to an ATM first to either withdraw money or check the old bank balance. Credit cards eliminate this chore by providing credit that you can spend then and there. Similarly, credit cards prevent the need to carry large sums of money on your person, so the purchase of more expensive products is easier and in fact safer.
- By now, pay later: When purchasing items with most credit cards you don’t have to actually physically hand over your hard earned until the bill comes. This is normally a month later, so providing you pay it off in full you’ve had this 40 and 60 day period as interest free.
3&4. Going on holiday? Then get free travel in insurance and other travel benefits: There are many travel benefits you can get with a credit card, many credit cards are accepted globally, so booking rental cars, hotels or paying restaurant bills is straightforward. With some card companies you will automatically be offered free travel insurance, while other companies will instead activate free travel insurance if you buy airline tickets with that credit card.
- Controlling your spend: With the detail credit card statements go into, you can easily keep in control and budget your spending. Knowing where it is going on a monthly basis you can review what it has been spent on and change your spending habits accordingly, before the spending gets out of control.
- Cover for the goods you’ve bought: Most cards will also offer purchase protection, so if your purchases are stolen or just lost or faulty they will be covered by the credit card company. Obviously, you will not get this added layer of protection if you paid by debit card or cash, which makes it worthwhile to buy large and/or expensive buys on your card, such as electrical goods, jewellery etc.
- Internet Shopping: According to the EU’s statistical office, Eurostat, the UK is the undisputed number one country for internet shopping. With nearly 80% of British internet users buying or paying for items and services in 2010, tying into point number six nicely as again, credit cards offer secure and encrypted way to buy goods. You can even have you card details securely stored for fast ‘one click’ payment on some online shops.
- Added Security: This may be a slightly obvious point, but an important one nonetheless. It goes without saying that carrying large sums of cash on your person at any one time is extremely risky. Should your cash be stolen, there is nothing you can do to get it back. Whereas if you replace that wad of cash with a credit card and that gets stolen, you can simply cancel the card in order to protect yourself from identity fraud.
- Improve Your Credit Rating: Providing you make all your monthly repayments on time, holding a credit card can significantly improve your credit rating as your credit file will highlight your blemish free payment record. This will in turn help you benefit from good rates and deals on any future loans you obtain, such as a mortgage or an unsecured loan.
- Credit that is Interest Free: The major credit card companies do not charge any interest if the full amount owed is repaid before the date repayment is required. Keep an eye out though as if the card company charges an annual fee then you are paying something for the credit.