Credit cards are quite useful especially in emergencies. It is really important to be aware of situations where a credit card would be useful when compared to a debit card or cash. This guide will explain ten situations where credit cards would be useful for you.
1. Expensive Products
It is good to use a credit card to purchase expensive products such as a TV or other appliances. You need not dip into your savings to pay the full price. You can easily pay the amount in instalments over a period of time.
You also would get an interest-free period on your card where if you have to return the appliance, you need not pay any money or interest on it as you would get your money back.
2. Online Shopping
It is better to use credit cards rather than debit cards for any online purchases. There is a risk of identity theft where your personal information and bank details could be stolen to make fraudulent purchases. If you use your debit card for online shopping, then there is risk of hackers getting your bank information which is linked to your debit card.
If you use a credit card, then hackers cannot access any bank information. You can keep checking your credit card statement to identify any unauthorised or fraudulent transactions.
3. Monthly Payments
You can use your credit card to make monthly payments. Whether it is utility bills or personal loans, you can set up recurring payments on your card. This will ensure that all your bills are paid on time, either before or on the due date.
On-time payments will not lead to any extra expenses due to late payments. It will also guarantee that all your bills are in order.
4. While Travelling
Credit cards are especially useful while travelling. You get incentives on your card such as complimentary access to premium lounges, concierge services, access to golf courses overseas and many more.
Such benefits enhance your travel experience and allow you to get the most of your travel.
5. Reward Points
Most credit cards offer reward points when you use the card for various purchases. You can accumulate these points and redeem them for various products such as travel vouchers, gift coupons, Air Miles and so on.
As long as you pay your monthly minimum due on time, these reward points would allow you to choose a product that you want or prefer.
Most card offer complimentary travel insurance when you buy airline tickets using your card. This insurance would cover any travel inconveniences such as missed flight connects, flight delay, baggage delay or baggage loss.
You would also get free cover for any mishap or loss to life during your travel. You need not spend your savings for such reason on your travel.
7. Universal Acceptance
Most merchants and outlets throughout the globe accept credit cards. There are certain purchases that you cannot make on your debit card. Some hotels or rental car companies expect their customers to pay with their credit cards rather than debit cards or cash.
Credit card payments make it easy for them to charge customers for any damages caused to their rooms or vehicles. Some may accept a debit card, but would put a hold on a specific amount in your account for any charges or emergencies.
At times while you are travelling on a foreign country, some merchants or outlets may not accept a debit card even if it is from a major bank.
8. Sign-up Bonus
Most credit cards offer a sign-up bonus as a welcome perk. You can either get a cashback or a large number of reward points when you activate your credit card within a specified time period imposed by your bank.
The cashback would be credited to your account and the reward points would reflect on your account. You can use this bonus to shop for more and get a product of your preference.
Cards offer cashbacks and cash rebates for spending on a specific category. Such categories wold include retails purchases, overseas transactions, grocery purchases, fuel purchases, dining and so on.
If you spend more on a particular category, then a card that offers cashback on that category would be ideal for you. Each month when you spend a certain amount on your card, the cashback would be calculated at the end of the billing cycle.
This cashback would be credited to your card or account in the following month. You can use the cashback as per your preference.
10. Build-up Credit Score
A good credit score is vital for your financial history. You can use your credit card responsibly to build up your credit score. Your credit report would be based on the last 12 months of your financial history.
When you use your card for purchases and pay your card bills on time, you will improve your credit score.
Credit cards are quite useful in other situation as well. As long as you are responsible with your credit card usage, you can gain a lot of incentives and benefits from your card. Use your card wisely to continue to enjoy its benefits.