We are often warned about the dangers of credit card debt, and rightly so! Credit card debt can be crippling for those with bad spending habits. But if you are good at living within your budget, using a credit card can be a great opportunity.
For the responsible credit card user, there are a lot of benefits to using a credit card. From building credit to frequent flyer miles, here is a list of reasons for consumers to be regularly using your credit card to make everyday purchases.
Use a Credit Card To Build Credit
One of the biggest reasons to use your credit card is that it gives you an opportunity to build credit and get a good credit score. A credit score is a numerical value that is based on how successful you are at paying off debts. If you want to make a big purchase, such as a house or a car, you may need a loan to finance the purchase. A poor credit score can make getting a loan difficult. In contrast, purchases made with your debit card will not show up on your credit score.
By using your credit card responsibility and paying off the balance every month, you can improve your own credit. If your future plans involve a large purchase such as real estate, it may be wise to start building your credit up now. Don’t let your future get delayed a few years; build up your credit score so that when the time is right, and you’ll be ready to make that big purchase!
Credit Card Rewards
Oftentimes, credit card companies will offer programs that reward people for spending more money on their credit cards. Some of these programs include:
The concept of reward points is simple: credit card users earn a set amount of points per dollar spent on the credit card, which are redeemable for various items. Rewards for points typically include travel, gift cards, restaurant vouchers, and company merchandise.
Credit card companies also often collaborate with hotel chains and fashion brands, so that frequent customers can cash in on their everyday spending. This can become a slippery slope if you alter your spending habits due to the card, but if you only sign up for cards of places that you frequent anyway, you wouldn’t want to miss out on a good deal.
If you already have a credit card and have been using it responsibly for a while, you might want to consider upgrading to receive a one-time sign-on bonus. Some companies offer users with good or excellent credit a one-time bonus of $150 or more if the credit card user hits a certain spending threshold within a period of time.
Introduced first by Discover, the premise of cash-back is simple: 1% of all money spent on the credit card goes back to the user in the form of cash. Since then, many other companies have offered their own spin on it. Many cards have competitive cash back rates like 2% or 3%, and certain promotional cards may offer as high as 6% on certain purchases. Do your research to find a card that offers a comparable reward, while also having minimal fees and interests.
Frequent Flyer Miles
This is one of the very first incentives to have been offered to credit card users. By a stroke of promotional genius, in the early 80s, American Airlines paired with Citibank to give credit card users a chance to earn frequent flyer miles by spending money with their Citibank cards. The idea caught on like wildfire, and now nearly every major US airline has a partnership with a credit card company.
If you’re passionate about travel, an easy way to save on plane tickets is to use a credit card for everyday purchases like groceries, gas, or even when stock picking. Some credit cards also pair with hotel chains, so you also may have an opportunity to build rewards points with your everyday purchases.
Credit Cards Are Great When Traveling
In addition to frequent flyer miles and rewards points that are redeemable at certain hotel chains, there are even more reasons frequent travelers need a credit card. Cash can be stolen, and most places no longer accept traveler’s checks. If you want to travel efficiently and be able to make purchases, it can be smart to use a credit card.
No Foreign Transaction Fees
Unlike a debit card that will charge a high fee for transactions outside your home country, credit cards can generally be used free of foreign transaction fees. People traveling without a credit card often have to carry lots of cash, which cannot be recovered in case of theft. Credit cards have the advantage of being accepted universally.
Accepted by Hotels and Car Rentals
Hotels and car rentals often do not accept debit cards as a form of payment. Hotel and rental companies have strict requirements about using a credit card because it is much easier to charge a credit card for damages that may occur to the room or car. If you do not have a credit card, you will often be expected to pay a hefty deposit, if you are not refused outright.
Protection Against Fraud
If someone uses a debit card for a fraudulent purchase, the money will be gone from your bank account immediately. Credit cards offer protection against fraudulent purchases because if you report fraudulent charges to the credit card company, they can be canceled. If a credit card company suspects a fraudulent purchase is being made, you will receive an alert before the purchase can go through.
There are many great reasons to use a credit card. From building good credit to the advantages they give you traveling and protections from fraud, you don’t want to miss out on the opportunities credit cards offer. Whether you’re using your credit card for gas or using it for stock picking, don’t miss out on cash back and other great rewards.
To find out more information about the benefits of using a credit card or to start accepting credit cards from your customers, you can visit Charge.com or call (888) 924-2743. No matter what you sell or how you sell it, Charge.com can help your business succeed and grow.