Five Reasons Why You Should Have A Credit Card

Five Reasons Why You Should Have A Credit Card

What does a credit card do?

Every time that you swipe your best credit cards, you are borrowing money against your credit limit. A Credit Card is one of the most convenient ways to pay. If you use it right, you can enjoy many rewards, interest-free credit, and freedom from cash.

Here are a few points to consider while deciding whether you want a credit card or not?

  1. Your credit score will become stagnant if there is no open line for credit and it will also make larger purchases in the future difficult:

If you are looking for a healthy financial profile, then it becomes highly essential that you have some credit score in your credit card. Without a credit card, you cannot have a credit score. A credit score can help you make a more significant purchase such as buying a house, renting an apartment which becomes difficult as per balance. In turn, you may be charged more amount of money without having a credit score.

One of the most contributing editors at Bankrate named Jean Chatzky once said in the New York Times, that all the young individual with less or negligible credit history have “thin” credit file. According to him, this can make the situation difficult to get any loan or make a bigger purchase on your own.

  1. You’re more protected from fraud if you have a credit card:

If you are not a credit card holder, it is more likely for you to have a debit card, or make your payments in cash. There are few problems with the use of money as well as a debit card. If you are carrying cash always, there are chances that it would get stolen or if it disappears. You are not going to get your money back once it is stolen. Credit cards have much stronger protection against fraud, and it’s much easy to block your card or get back your card once it is lost or stolen.

  1. Credit cards can help you in an emergency

When you use a credit card, you always have some amount of money in your account. Whether you have one lakh or fifty thousand, there is a properly protected money to you which can be borrowed without paying interest on it.

The only matter of concern with the use of credit card is that you must pay your bills on time or the bank starts charging you some interest on the outstanding balance.

If you do not have even one credit card, you need to pay everywhere from your pocket, which can lead to the end of money without having any stored in the bank.

  1. Credit cards offer various rewards and cash backs:

Several credit cards offer you cash back on their special schemed transaction. It may be points, rewards, or coupons that can be used in the future. If you prefer not to have a credit card, then you can also not increase your saved money. Paying through credit cards can also help you in earning points which can act as a discount in the future.

All credit cards have some or other programs that attract people. There may be a program where you can spend more to get more rewards or get a certain amount of cash back by paying your bills using your credit card. Without having a credit card, you may not be able to enjoy these rewards or goodies.

  1. Online bookings can cost much less when done through credit card:

There are many rental car services, hotels, restaurants that demand an online payment using a credit card. They might offer you a debit card option too, but it requires a large deposit and charges a higher rate of interest than other people who would be using credit cards.

With a debit card, you might spend a lot more than the initial cost. Use of credit card minimizes it and helps you get budget essentials.