Everywhere seems to talk about how bad credit cards are unless you’re a responsible adult who knows how to handle their money. For many young people, the prospect of owning a credit card feels incredibly mature but also daunting. Seriously, the thought of it is terrifying. Yet, despite all the insinuations that credit cards are a dangerous item to own, they’re actually incredibly useful. More so than a debit card. These are the reasons why you should consider getting one…
It will protect your bank account
Losing your card – whether it’s credit or debit – is always a risk and it’s not something to be taken lightly. If your card goes missing and could potentially be in the hands of someone else, you should go through the necessary measures to report it as stolen and have it cut off. The problem is, if it’s a debit card that gets taken, you could still lose your money before the issue is dealt with. This is because debit cards are attached directly to your checking account, meaning the money is taken immediately once a payment is made.
Credit cards don’t work in the same way. No money is removed from your account until after you’ve paid your bill at the end of the month. If someone has stolen your card and made purchases on it, you can flag these up without losing any money. If you have important payments that need to be made, such as rent, then you won’t have to worry about being short of cash.
There’s added purchase and travel protections
Depending on where you source your credit card from, there’s the opportunity to have added protection on certain purchases. This can include payment cover for things like hotel stays if your travel is delayed by a prolonged length of time. You won’t get this protection on everything, and you have to have used your credit card for the original payment, but this can come in handy if things don’t go your way. You also might receive cover if items you purchase are damaged or stolen, so there’s really no reason not to invest in a credit card.
Rewards are everywhere
Purchase and travel protections aren’t the only financial benefit that credit cards provide. Many banks offer rewards for people who use credit cards because they receive a profit when these are used at retailers. These rewards might come in the form of cash back on purchases or as a points system that provides bonuses over time. Usually, where rewards are offered, there are also sign-up benefits which work in a similar fashion. You can receive a defined amount of money back if you spend so much within a designated time frame. These are all things that you don’t tend to get with a debit card.
You’ll improve your credit history
Credit history is something that all of us has, and it takes into account the various loans we’ve applied for and whether they were paid back. If you are good with your credit, such as always making payments on time or having little to no debt, then your history will be a positive reflection of that. This can be beneficial in the future if you ever need to take out a big loan for something like a mortgage.
Owning a credit card is one of the best and easiest ways to improve your credit history. Yes, using one comes with the possibility of ruining it, but if you never miss a payment, then you’ll have nothing to worry about. If you avoid being reckless with money, then a credit card can only do you good.
Don’t be scared off by all the “risks” that surround credit cards. Debt is easily avoidable if you’re careful with your spending and shouldn’t put you off investing in your future.