Credit Card Benefits

So it’s no surprise that credit cards are big business – popular among consumers and government alike. Credit cards offer us the flexibility to pay for something now and repay it later, over a period of months or even years if necessary. Credit cards are adaptable, places where they can be used include:

• online,
• in stores,
• gas stations,
• restaurants
• bars, and
• ATMs.

Credit card benefits don’t stop there, a credit card is a safety net should we be faced with an emergency or simply because the refrigerator broke down. Credit cards offer a fast, secure and effective way of paying for all kinds of purchases. Instead of carrying around pocketfuls of nickels and dimes, items can be charged straight onto a credit card.

Yes folks, it’s true, a credit card is your flexible friend!

However, even the best of friends don’t always stay friends forever. The best relationships operate on a mutual understanding and your plastic pal should be no different. Only use your credit card within the limit and never beyond affordable amounts. The fact that the average American has a credit card debt of $8,000 suggests credit cards are overly relied on and mismanaged.

So with that word of warning out the way, let’s look at other credit card advantages.

Credit cards – Flexible finance

Credit cards offer a cheap form of borrowing to those who can afford to repay their balance in full each month. Alternatively a credit card enables the consumer to make a purchase now and pay for it later ie, when a bonus is due or once the holiday season has passed. Whichever way you choose to repay your balance, a credit card offers you flexibility and spending power when it’s needed most.

One significant advantage to using a credit card is online shopping. The majority of people who use their credit card online do so to book flight and make hotel reservations – saving them both time and money!

Credit cards – Credit repair

The credit crunch has put consumer credit history under the spotlight as lenders tighten their criteria on credit cards, mortgages and loans. In order to obtain the credit you need, your credit history must be free of missed payments and exceeded limits. If your credit history isn’t as spotless as you would like, your credit card can play a vital role in revitalising your credit file.

Using your credit card to make small purchases that can be repaid in full will go a long way to repairing your credit history. Over time, this will make you less of a credit risk to lenders and will help you secure the credit you need at the most favorable rates.

Credit cards – Cash back/ Incentives

With fewer people eligible for credit cards in light of the credit crunch, credit card companies have to fight tooth and nail for new business. One of the ways in which they do this is by offering incentives. Incentives are nothing new to credit cards and one of the biggest carrots dangled towards applicants is cash back offers. Cash backs vary but tend to be in the region of 0.50% to 1.00% of spending.

Shopping rewards and points can be accrued by using your credit card almost anywhere, such as your grocery store, gas station or local movie theatre.

Caution

If you are keen to take advantage of a credit card which offers excellent incentives such as cash back offers and other rewards, the trade off will probably be a card with a higher APR. How you tend to repay your balance will determine if you stand to gain or lose. Find out which card you should be applying for by visiting Which Card Suits You?

Also, be aware that incentives are sometimes only offered within a restricted time period. The terms and conditions for your contract will require careful scrutiny to ensure you take advantage of the rewards on offer.