A credit card is a simple financial product that can be used for everyday purchases such as gas, groceries, and other goods and services. It can also be a good tool to buy big ticket items such as TVs, travel packages, and jewelry because the money for these items is not always available. Below are some of the benefits offered by many credit cards. (Discover, 2019)
What Are the Benefits of Using Credit Cards?
Used properly, credit cards can be a useful tool to benefit, travel, handle emergencies or unplanned expenses, and build credit.
Credit card rewards do what its name implies: reward the cardholder with a purchase. Prizes can vary by issuer type and card type. Other rewards come in the form of refunds, discounts on fuel purchases, and even miles. For those who use their cards regularly, earning rewards is one of the biggest benefits of credit cards, as cardholders can redeem them on their purchases from time to time.
Credit cards can also be helpful when traveling. This is because some large companies that rent cars and hotels need to hold on to a credit or bank card to keep a car or book a room. This process can take a few days or more. At this time, the credit card or bank card holder is not available for use. Because you may not have the necessary funds in your bank account, credit cards increase your purchasing power, giving you the time you need.
Some credit cards offer fraudulent schemes to serve as a security net if someone is caught stealing your credit card or personal information while traveling. In the case of fraudulent activity, a warning can be sent by phone, email, or text message, and transactions can be suspended. Because a credit card is not linked to a check or savings account, it is unlikely that the thief will be able to access these accounts. (Discover, 2019)
You need to know 5 reward cards:
• Highly paid reward cards from Amex
If you want a refund or a reward card, your best bet could be a card from the American Express range – they have excellent import bonuses and offer unparalleled continuous rewards compared to other markets. (Talbot, 2018)
• Top credit cards are not Amex
As mentioned above, the most expensive payment cards come from American Express. But if you already have Amex, don’t get it, or need a backup when it’s not accepted, there are a few options – especially from the chains of supermarkets. This gives you a great advantage when used in those stores, but gives you points when used elsewhere.
• Refund sites can pay for your subscription
As an added blessing, members of a special website refund can be paid when registering for certain financial products. See if it is the same agreement now, as the terms may vary. Also keep in mind that refunds have never been 100% guaranteed on your account. For complete assistance using this and their pros and cons, see our Top Guide for Reimbursement. (Talbot, 2018)
• Coronavirus credit card assistance
If you have trouble paying with an existing credit card due to coronavirus, lenders should offer support. However, having one is still beyond the reach of the average person.
Why credit cards can be a problem if interest rates are too high and you don’t pay them:
While it is true that your credit score plays an important role in determining your interest rate on any new credit card, there are a few reasons why that value is so high on credit cards – and it has nothing to do with your creditworthiness.
Below are three reasons why your credit card interest rate is so high and what you can do to avoid worrying about it.
- Credit cards are unsecured loans
- Credit cards are not expected
- Credit card companies need to make a profit
How to avoid high interest rates
Credit cards are known for high interest rates, but the good news is that you do not have to pay for them if you have never managed your balance. This is one of the few ways you can avoid paying high interest rates on credit cards. (Gravier, 2020)
Tree most important points rules
1. Pay your balance in full each month: High interest rates only hurt you if you have a balance. Make sure you pay your monthly payments to avoid interest, and if you have trouble remembering to pay on time, change your bills to help.
2. Get a low-interest credit card: If you think you might end up with some money left over, consider a low-interest credit card. It is not good to have a rate, but going with a low interest rate card can at least save you money. Other low interest rates we have received include the Capital One Venture One Rewards Card and the US Bank Bank Visa Platinum Card.
3. Ask for a lower APR: You can try calling your card issuer and negotiate lower interest rates. Remember that before doing so you will want to make sure you have good credit and a healthy payment record to show.
Credit cards can help consumers, offering many benefits and advantages. Because they are a much better option than cash, they are much better if you need to buy when you find yourself in the middle. Some cards offer benefits such as rewards such as refunds or miles, while others offer additional security for your purchase. (Gravier, 2020)
Click here to visit our learning section
Click here to try out our Risk Calculator
We recommend looking at Money Saving Experts credit card guide for the best rates.