12/20/2018

7 Reasons Why Credit Cards Are Good





Credit cards have built up somewhat of a bad reputation. Many people use them irresponsibly and to live beyond their means, and then struggle to pay them off when it comes to it. The cycle of credit card debt is difficult to get out of - run up a debt, then get into more debt trying to pay them off.

The thing is, if used correctly and responsibly, credit cards can be useful. If your credit score allows it, you have the willpower not to use it for unnecessary and extravagant purchases, and you have the means to pay it off, they can actually be a handy financial tool, especially if you find the right one for you from cardguru. Here, we look at why they aren't as bad as you think.

They help you to build your credit score.
Using a credit card for smaller purchases - maybe a weekly grocery shop - and then paying it off as soon as you get the bill is an excellent way of establishing a good credit history and rebuilding a  poor credit score. Without this history, it can be very difficult to get any other forms of credit such as bank loans or overdrafts, car finance, mortgages or even something.

They are a source of emergency money.
No, that pair of Christian Louboutins is not an emergency purchase! I am talking about emergency plane tickets, car repairs or replacing a cooker or washer. While it would be a much better idea to have some savings for situations like that, realistically, many of us do not have $1000 stashed away, so when the need for emergency cash arises, a credit card can be useful.

They offer fraud and theft protection.
If your card is lost and stolen, you are only liable for the first few dollars of charges - usually $50 or so, unlike debit cards where you have a shorter time frame to report any unauthorized charges or theft and are liable for a higher amount.

They offer protection against disputed charges.
With a debit card, if you raise a dispute over a charge, the money will not usually be returned if you cannot prove it - and even then, you may have to wait a while. With most credit cards, the charges are removed immediately, until the dispute is resolved.

Many offer rewards
Many credit card companies offer rewards and incentives including air miles, cash back, discounts and gift cards. While the majority of these rewards are designed to get people hooked into using the cards or spending more than they would otherwise, if they are correctly used, rewards points can earn you a lot of money. Some offer to sign up bonuses just for taking out a card and meeting a minimum spend.

Extended warranties
Many credit card companies offer an extended warranty if you purchase something on a credit card, sometimes even doubling the manufacturer's warranty, making it useful for those bigger purchases.

Car Rental
Without a credit card, many car rental agencies will not allow you to rent a car, as they need some sort of security measure. Some will allow you to use a debit card, but may ‘lock’ the funds, which can be a substantial amount, so you can’t use them until the car is returned.

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