Why Should I Use a Credit Card?

Owning a credit card comes with plenty of benefits for the cardholder. Different cards offer certain beneficial aspects, making it important to do your research on all cards offering what you are looking for in a card.

For example, some cards place an emphasis on their rewards program while others boast a low APR for balance transfers and purchases. There is, however, a long list of pros and cons potential cardholders should be aware of before deciding whether or not to apply for a credit card, and if so, which one.

The rewards of owning a credit card

Many credit cards offer their cardholders a generous welcome bonus. While some have benchmark requirements to earn this bonus, such as paying x amount of dollars within the first x months on purchases, many give you free points with your first purchase made. This is extremely beneficial since it allows cardholders to make money, something they would not be able to do with a debit card.

Depending on the card, there might be a rewards program. Rewards programs offer cardholders the ability to earn points on their purchases. Depending on the type of program, cardholders may earn more points on certain categories for an indefinite period of time or face a rotating category of rewards. Either way, everyday purchases will grant the cardholder’s points that can be redeemed for cash or other perks.

Besides rewards, some cards offer cashback deals. Simply using your card for certain transactions will put a percentage of cashback into your pockets. This means that by owning a credit card, you could actually be earning money through your everyday transactions.

Building your credit

It is useful to own a credit card for the simple, yet extremely valuable, reason of building your credit score. Even if you do not plan on using your card often, staying on top of monthly payments in a timely manner will go a long way to improve your score. Having a better credit score will allow you to upgrade to better credit cards in the future and be eligible for higher loans.

Safety credit card features

There are also many safety features credit cards have that debit cards do not. For example, many credit cards offer zero liability protection, meaning if there are any fraudulent charges on your account you will not be held accountable. In contrast, if someone steals and uses your debit card, the money will be gone from your account permanently.

Be wary of the cons of owning a card

There are plenty of benefits to owning a credit card, however, there are many pitfalls as well. Many fees associated with owning a credit card that debit cardholders are able to avoid. Some of these include an annual fee, foreign transaction fee, balance transfer fee, purchase fee, cash advance fee, APR on balance transfers and purchases, etc. While many cards minimize or limit these fees, it is important to note that there are still plenty to avoid.

It is also not beneficial to own a credit card if you think you will miss or be late on monthly payments. Being on time with your payments is crucial because failing to do so will result in high-interest fees and will also hurt your credit score.