Credit Card Expert

Why Have a Credit Card?
The Top 5 Reasons For Having a Credit Card

Credit cards, it seems, have gotten a bad reputation, and of course a great deal of this bad reputation is deserved.  With high fees and higher interest charges, the misuse of credit cards is a chief cause of much financial misery.  When used properly, however, these tiny pieces of plastic can be quite useful, and there are valid reasons for everyone to carry at least a single credit card.

It goes without saying, of course, that the key is to use that credit card wisely.  If credit cards are used foolishly, the benefits they can provide will quickly be overwhelmed by the negative consequences.  The benefits of credit cards are only possible for those who use them wisely and pay off their balance in fool every single month.  If that sounds like you, read on.  If not, work on getting your financial house in order and return here later.

Among the top five reasons for carrying a credit card are the following:


1. To start building a credit history – using a credit card wisely, and paying it off each month, is one of the best ways to establish a credit history.  Without a credit history, things like buying a car, taking out a mortgage or even landing a good job, can be difficult.  Responsible use of a credit card can help assure lenders that you are willing and able to pay your bills on time.


2. To make online purchases – it can be all but impossible to shop on the internet without a credit card.  The internet has a great many things to offer to consumers, including some of the lowest prices available anywhere.  Why miss out on all these bargains by not carrying a credit card.  Of course it is important to limit that online spending to an amount you will be able to pay in full when the bill shows up.


3. The rewards of membership – from free gift certificates to free airline miles to even free money, credit cards have a lot to offer.  If you are financially responsible and able to handle credit wisely, it would be foolish to miss out on all these goodies.  When shopping for a rewards card, be sure to choose one that matches your interests and your needs, and always read the fine print to make sure you are getting what you think you are.


4. Money in a pinch – while the best course of action is to stash three to six months of living expenses in an emergency fund, if you’re not quite there yet a credit card can help tide you over.  From unexpected car repairs to unexpected medical bills, emergencies happen, and a credit card can be a ready sort of cash when no other sources are available.  The key, of course, is to pay that money off as quickly as possible, and to keep building up that emergency fund each month.
 

5. Keeping track of purchases – those who hate to make up a budget may find the process easier when using the purchase history provided by the issuer of their credit cards.  These purchase histories are generally available at the end of each year, and they break down purchases into categories like food, clothing, entertainment, transportation and the like.  Seeing that you’ve been spending $300 a month on dining out may just encourage you to spend more on groceries and less on appetizers, thus giving your budget, and your bottom line, a boost.

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