10 Reasons To Use Your Credit Card

Although many financial experts attempt to prevent people from frequently using their credit cards, credit cards provide users with a wide range of benefits. While credit cards are usually discouraged since they are extremely easy to abuse, leaving a pile of debt in their wake, if used responsibly, credit cards easily trump both debit cards and check books.

Here are 10 reasons to start paying with plastic:

1. Signup Bonuses

When you open a checking or savings account, most people usually receive a debit card to access their funds. However, few debit cards offer rewards or bonuses. Many credit cards, on the other hand, offer a wide variety of rewards when they are used responsibly.

Usually, most applicants with good credit can get approved for credit cards with signup bonuses worth anywhere from $50 to $500.

2. Cash Back

Some of the best rewards offered on credit cards are cash back rewards, meaning that you receive anywhere from 1 percent to 5 percent back on your purchases, which can later be redeemed for cash.

3. Balance Transfer Credit Cards

For those who have multiple credit accounts open or multiple credit card debts, using a balance transfer credit card can help to eliminate your debt. Jeffrey Weber of SmartBalanceTransfers.com explains, “Balance transfer credit cards allow users the ability to pay down their debt while still maintaining a good credit repertoire.”

4. Frequent Flyer Miles

With airlines as expensive as they are today, getting a free flight is nearly as precious as gold. Many credit cards offer frequent flyer miles as rewards for your spending. Typically, cardholders rack up miles at a rate of one mile per dollar spent, with some cards having annual bonuses where cardholders can earn twice as much.

5. Points

Many credit cards work on a point system where you can earn points per dollar spent. After reaching a certain point threshold, you can redeem your points as cash, gift cards, airline tickets, or hotel stays.

6. Safety

Paying with credit makes it easier to avoid losses from fraud. If someone steals your debit card, once it’s used, the money is gone instantly and it is extremely difficult to get that money back. However, if someone uses your credit card, you can notify your credit card company of fraud and they will refund the transactions.

7. Grace Period

Since you do not have to pay your bill right away, you can allow the money in your account to accumulate interest before paying off your credit bill.

8. Insurance

Most credit cards come with consumer protections like rental car insurance, travel insurance, and product warranties.

9. Investment Rewards

Some cards offer a higher rate of cash back if you directly deposit it into an investment account, which accumulates interest.

10. Building Credit

Using your credit card and faithfully paying it off gives you a good credit score, which is vital to securing home loans, business loans, bank loans, or other large loans from lenders or investors.

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