In this day and age, credit cards are everywhere, everyone has one and everyone else wants you to apply for a credit card, but what exactly are the benefits of a credit card?
Firstly they are a great business tool, if you own a business, are looking at starting a business or have business plans in the future, then they are essential. While I personally agree to the philosophy that ‘it’s better to only spend the money that you already have’, it’s also very difficult in this economy to have extra money to be able to spend.
The beauty of a credit card is that it allows you to spend money that you don’t have yet, but you know you will have.
Credit cards also often come with different reward schemes, often if you apply for a credit card, the Bank’s will offer an extra incentive to make you choose them over the competition, while this shouldn’t be the sole reason you choose to get a credit card.
Most credit cards allow a number of different insurances so there’s less things to worry about. If you like to travel a credit card is an absolute must, a lot of car hire companies will not allow you to hire through them if you don’t have a credit card, or if they do, they take a substantially larger amount of money out of your account (I should know, I had $900 taken from my account on my last overseas trip which should have only been $400, all because I wasn’t able to get a credit card in time).
A number of credit card providers also include travel insurance when you apply and if you’ve ever travelled you know how important travel insurance is, you can get it through a travel agent, or find it yourself, but how much easier would it be if you already had it with your credit card?
All good credit cards also come with protection against scam and fraud, if someone swipes your card while you’re out and about, or you just happen to misplace or drop your card, don’t worry, you’ll be covered for that. All you have to do is let the company you’re with know what’s happened and they’ll freeze the card, cancel any transactions made while the card was not in your possession and re-send you your card.
Another benefit (and this is a big one) of having a credit card is currency conversion. While there is a marginal fee applied to any transaction that needs to be converted into a different currency, you’ll often suffer some sort of small depreciation when converting currency anyway. This just means you won’t have to go to your local bank (or wherever you go to convert your currency) to be able to spend your hard earned overseas.
I often buy things from America and I can only imagine how much of a pain it would be if I had to go down to my local branch and convert my money into USD every single time I wanted to buy something.
Also Read: Making Future Safer and Better
Lastly, here’s a big one, that until recently I actually had no idea about.
“Credit cards build your credit rating.”
In today’s society this is huge, if you ever want to buy a house, get a loan for a brand-new car, rent, or basically anything else that requires you to have some sort of loan, a credit card is the first step. Owning a credit card (and paying it back on time) proves to any bank, broker or person needing to verify your credit rating that you can and will pay them back, it proves to them that you’re a good investment.
There are more benefits of having a credit card than listed here, but these are some of the biggest reasons. As long as you can pay them back, they’re a must have investment.
When you apply for a credit card, make sure to check exactly what they cover, not everything listed here is covered by every company.