It seems like the talk of town from everyone is that credit cards are evil, and everyone should stay away from them. Heck, if you really did some basic research online, there are some “financial gurus” that make this point that you should never open up a credit card and you are doomed if you dare to. So, I can understand where everyone is coming from with the statement of staying from credit cards. First of all, if you really do not have any self-control, then it probably would be best to stay away since the freedom you have with a decent credit limit and just telling yourself I can pay it off sometime later is dangerous. Also, if your spending habits in general are out of control, you really should try to get some good habits in place to correct those issues before you have that credit limit to spend on everything useless. One of my personal favorite dangers too is throwing the monthly subscriptions on the card and not even realizing what you are actually spending on all that stuff (i.e. Hulu, Netflix, Gym).
With all of this said, there are some very good reasons why having at least one credit card is a very good thing. And disclaimer of course, I am not a personal financial advisor or anything and everyone has their own unique situation, so please do some research for what makes the most sense with you but I find these reasons very appealing and they are why I have two credit cards to my name.
1. Build up Credit
Basic I know right? But it is true. Credit cards are a great way to build up your credit score and provide a track record of you paying your bills on time which will help with future larger purchases down the road to have lower interest rates and qualify for higher loans. Also, if you are on the younger side, credit cards are a great way to start your credit history as well as get in the habit of paying your bills and most importantly paying them on time.
2. Helps Budget and Keep Track of Spending
There are really two sides to how best to keep track of spending. One is to withdraw cash or use your debit card straight from your checking or savings account so that way you are not induced to spend a lot and you can control yourself with spending due to how much you actually have available or how much cash you actually withdrew. I actually agree that this is a good idea. I will say though from my experiences using a credit card is a lot easier (as long as you can control your spending habits). Credit card companies’ interfaces are really advanced now, and they can breakdown for you the category of each payment you had of spending (i.e. gas, food). You can start to track how much you spend in each category either through a spreadsheet or an online personal finance tracking software like Mint.com. Now I haven’t used Mint myself, but I do know friends that use the platform and swear by it. But anyways the main point here is credit cards provide you a history of what the heck you actually are spending your money on and not just a withdrawal of cash and asking yourself later where did my cash go.
3. Rewards Points
The hidden not so hidden anymore perk to credit cards. REWARDS. Credit card companies provide incentives to sign up and use their cards through multiple avenues but a main one is the reward perks of their own individual card. These can be from cash back rewards, travel points, flight mileage points etc. My personal card (Capital One) has a 1.5% cash back rewards meaning as an example for every one hundred dollars I spend, I get one and a half dollars cash back in my account. That does not sound like a lot initially, but it adds up over time. And it is a simple click to redeem the cash in my account. There is no crazy process to redeem it at all. And not only with the cash back cards, but the travel cards as mentioned are great as well since you can collect points either through actual travel or spending habits and use those points for flight discounts or even hotel discounts. Reward points are essentially just an extra bonus to you spending money that you already will be spending anyways.
I am sure there are a lot more perks to using credit cards than the one’s mentioned above but my main goal with the post is for you and other readers to start doing your research on why credit cards are not bad and start to investigate it more.
Thank you for reading my post and please give a like and follow the blog if you enjoyed. I like the idea of going more in depth with this kind of stuff or health related stuff I am not quite sure. I want to see what the people like.
Anyways thanks for checking this out!
Mike M.
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