Five Reasons to Have a Credit Card
Contrary to popular belief, credit cards are not our enemy. In fact, they can be extremely beneficial to us in many ways. Of course, handling our credit responsibly is of the utmost importance, so it is vital that we become educated on how to responsibly use credit cards before we get in over our heads in credit card debt.
If you are prepared to handle your credit card debt in a responsible manner, then you should understand the many ways in which credit cards can help you and your credit.
You should have a credit card to:
- Build your Credit Score - In order to have good credit, you must first have credit! A good credit score typically shows credit in different areas; namely, installment loans and credit cards. Creditors are unlikely to approve you for larger loans such as cars and homes if you have not proven your credit worthiness. And a credit card is the way to show this!
- Build your Credit History – Just like building your credit score, a creditor simply can’t consider you a good credit risk if you don’t first establish a strong credit history. A great way to establish your credit history is to charge several purchases each month and pay off those purchases in full at every billing cycle.
- Protect your Investments - Many credit card companies offer purchase protection, which can be extremely valuable if you use your credit card to make large purchases. Each credit card company has different policies regarding purchase protection, but most cover the cost of replacement in case of theft or damage.
- Take Advantage of Reward Programs – Many of today’s credit cards come with perks in the form of reward programs. From free airfare and free hotel stays to cash-back programs and discounted vacations, reward programs offer fabulous rewards for simply using your credit card for purchases.
- Protect yourself in Case of an Emergency - A credit card can quickly become your best friend if you find yourself in an emergency situation without cash. A credit card may allow you to replace a broken furnace; it may allow you to purchase last-minute airfare; or it may enable you to have your car repaired. Whatever the reason, a credit card may prove to be extremely useful for those moments in your life when you need financial help.
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