Credit card benefits
If you're not sure of the benefits of owning a credit card, then you could be missing out. Here are just a few of the obvious and not-so-obvious benefits of putting it on plastic.
Managed correctly, a credit card has many uses in day-to-day life. Not only could that little piece of plastic prove beneficial in building your credit history, but it can also serve as a safe means to buy online – whether it's a holiday in the sun or your weekly shop.
Your credit rating
Regular use of a credit card is no bad thing, as long as it's handled responsibly. In fact, use your card frequently and pay the balance in full each month and you could build up a good credit rating. This means that, should you want to get credit in the future – for example, taking out a mortgage or applying for another credit card or a loan – your chances of being accepted improve. It's not just a poor credit score that can affect your chances of getting credit, though – because lenders use your credit history to predict your future habits, a lack of information can also affect whether or not your application is accepted or declined.
Convenience and flexibility
There are many reasons why a credit card is handy to have around. They are accepted worldwide, and if you're not keen on carrying cash, a card could be a simple solution. A credit card can also be a useful way to cover unexpected or emergency costs – such as repairing a broken appliance – and pay back the balance later.
Using your credit card to buy online is not only easy but safe too, thanks to modern security and fraud measures. Credit card transactions are closely monitored by banks for fraudulent activity, so if you are affected by credit card fraud, you won't have to pay for transactions you didn't make; rather, notify your credit card company and they'll resolve the rest. It can be safer to spend on a credit card abroad, too – for example, if it gets stolen or lost on the beach, you can report it missing immediately and be issued with a replacement card.
Bookings and deposits
Some companies, such as hotels and car rental businesses, insist on taking your credit card details as a deposit, so a credit card can be really useful when travelling.
A card that offers a balance transfer could be a useful tool for organising your finances. If you use a 0% balance transfer offer period, then you could save on interest payments.
Whether it's saving points to spend on groceries, fuel or even air miles, or getting cash back on your purchases, there are many extra benefits to owning a credit card that you don't get when using cash. You could look for a card with rewards that will benefit you most, and you could receive regular discounts on your grocery bill – or even money off a holiday abroad.