Most personal money management experts spend a lot of their time telling people not to use credit cards for a few good reasons. A lot of credit card holders heavily abuse them until they end up drowning in debt. However this is true, credit cards are also extremely useful and beneficial given they are used wisely. Financial experts even say that it’s actually better paying with credit cards than with debit. Here are five reasons why you should apply for credit cards.
Traditional debit cards offer no rewards or very few rewards to its account holders. On the other hand, credit card holders enjoy significant rewards when they used their cards responsibly. For instance, credit card holders with excellent credit are routinely offered with sign up bonuses that are worth between $50 and $250 or even more. There are also card companies that provider high points that can be redeemed for rewards or gift cards that can be used by the credit card holders themselves or be given as gifts to other people.
Those who sign up for credit cards are provided 1% to 50% cash back on regular purchases.
Frequent flyer miles are definitely a popular offering among many credit card companies. Cardholders can accumulate miles at a rate of one mile per dollar worth of purchase. The total amount of the plane ticket that you redeem will determine the value of a credit card frequent flyers reward. More important to note is that even first=time credit card holders are given 50% up to 100% of the way towards a free flight within a short period of time.
Majority of credit cards work on a point system basis where holders can earn up to five points per dollar they spend using via card. Once you reach a certain amount of points, you may then exchange your points for items such as gift cards in selected stores. You may also use these gift cards as gifts to other people, thus making gift giving during special occasion easier and cheaper too.
Purchasing products and services is a great way to avoid losses as a result of fraudulent transactions. When the debit card is used fraudulently, the money is deducted from the account right away. As a result of this, legitimate or scheduled payments that you have setup online will bounce. This in turn may trigger insufficient funding problems. Late payments via debit can potentially lower your credit score. It may also take a long while for companies to reimburse money lost from fraudulent transactions.
On the other hand, when a credit card is used fraudulently, card holders do not run out of money instantly. Once you have noticed fraud in your account, you can simply report this to your credit card provided, and an investigation ensues. Your account will not be compromised until the company resolves the matter.