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Why Do I Need a Credit Card?

Why Do I Need a Credit Card?

July 19, 2016
credit card
source: Shutterstock

Since the last recession, Americans have started to rely less and less on credit cards. You might say that this is a good thing since living debt-free is always great. But this lifestyle also comes with some disadvantages. Believe it or not, credit cards do come with some unique benefits, especially if you pay off your credit card balance every month.

So, do we really need plastic in our lives? I believe that we do. Below, you will find some reasons why.

1. Internet Purchases

As an avid online shopper, this is my personal favourite. You can find some of the best deals on the internet and the thing is you can only pay for these items with a credit card. But that’s OK, because plastic can actually save you money. Without a credit card, you have to pay a lot more for these things.

2. Rewards

I use my credit card a lot. And the reason for this is the many rewards that it comes with. Many credit cards include these awards. They can range from cash back to free airline tickets, and they can really come in handy sometimes. Just think about it. If you have to travel a lot, a free ticket every once in a while can really come in handy.

3. It can be very helpful when traveling

It’s never a good idea to carry large amounts of cash with you when you travel, no matter if you do it in the U.S. or abroad. And you do need large amounts, since traveling can be very expensive. A credit card can be very helpful in this situation. It can provide you with easy foreign exchange, at better rates than what banks have to offer, and it can also keep your money safe.

4. Less stress

Don’t underestimate the benefits of less stress. We all need less stress in our already stressful lives. Knowing that your money is safe can be a huge stress relief. It will only cost you a maximum $50 if you lose your credit card, or if it gets stolen. And, by the way, many companies will waive even this fee.

5. A credit card can help you better organize your life

I’m not the type of person who keeps track of receipts. Instead, I get out a complete summary of my credit card spending each month. It’s easy, it’s efficient and it saves me a lot of time. And you can manage your budget a lot better when you know where your money is going.

6. It provides insurance for the items that you purchase

Some credit cards actually provide you with protection for the items that you purchase, for a certain period of time. In case an accident happens and you damage an item that you recently purchased, you can get your money back!

7. Dishonest merchants won’t be able to steal from you

If you pay with a credit card when you make a purchase and the seller doesn’t come through, the credit card company will help you get the money back. But, if you pay in cash, getting the money back will turn into a very costly and time consuming process. You lose even if you do succeed.

8. A helping hand in case of emergencies

In case of an emergency, you will immediately have access to all the funds that you need, no matter where you are or what time it is.

9. Interest-free money

If you keep your money in an interest-bearing account, you can actually earn money between the time when you buy an item with your credit card and the time when you pay off your credit card.

10. Improve your credit score

We all know how important credit score is. A high credit score means that you will pay a lower interest rate on mortgage or auto loans than someone with a poor score. And this can result in you saving thousands of dollars over the life of that loan. Using your credit card responsibly can improve your credit score.

Thomas Hookton

Thomas Hookton is a finance journalist, history buff and science fiction connoisseur. Hit him up via email.

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