Credit cards can be an extremely useful way of getting access to the cash you need, providing you’re able to pay back the full sum on the deadline. They are convenient for everyday purchase such as the likes of petrol and household bills and even more costly expenses such as holidays. Before you use your credit card, you must be aware of the rules and regulations in place to prevent landing yourself in financial difficulty.
Why should you use a credit card?
Keep track of how much you’re spending
One of the main reasons why people choose to use a credit card is since you’re able to keep track of your expenditure. It’s easy to spend cash without thought and you may become confused as to where it has been spent, however, having a credit card means you’ll receive a statement at the end of the month with every transaction listed. Therefore, you’ll be fully aware of how and where money has been spent during each month. Ultimately, this becomes a useful method to manage your finances and prevent overspending.
Paying with a credit card is undeniably the safest way to pay and eliminates personal losses and fraudulent activity.
If your debit card has been stolen and used by a thief, the money will be withdrawn instantly from your account and will not be returned to you until the bank undergoes a thorough investigation. Alternatively, you’ll never be left short of money with a credit card as the card company will deal with the fraudulent claim on your behalf before the bill needs to be paid.
Building your credit score
If you have the ambition of building your credit score, getting a credit card will work in your favour, providing you’re able to pay the bill in full at the end of each month. Lenders typically look at your credit history and designate you a credit score based on the information provided. It’s essential to have a good credit score, as this can give you the opportunity of additional benefits and even allow you to apply for a loan, such as a mortgage when purchasing a property.
Benefits and rewards
Some credit card companies also provide various incentives and benefits for users, which may sway your decision on which one to choose. Rewards points are a typical enticement to get money off in restaurants, supermarkets and even at the petrol station to name just a few. There are, however, there are several benefits to find out about before deciding as to which credit card company to choose to make the best decision for you.
How can you use your credit card effectively?
To make sure you’re getting the best out of your credit card, remember the following:
- Always remember to pay the bill on time.
- Pay more than the minimum requirements.
- Find a credit card to match your personal needs.
When not to use a credit card
Paying with credit cards isn’t always the best method – but this is mostly down to your spending habits. Using a credit card has many advantages such as those listed above, but it may not be the best option for you for the following reasons:
- You can’t pay back the full balance or on the deadline date – resulting in high-interest charges.
- You tend to spend more than you can realistically afford.
If you are concerned as to whether having a credit card is the best option for you, it would be worth contacting a credit card company to discuss personal circumstances and any concerns you may have.