Benefit of Credit Cards
Even through there are some problems of having a credit card, such
as late fees, high interest, Etc., it still has a lot of advantages in having one.
I will be going over most of the advantages of owning a credit card in this article.
The benefits of having a credit card are the free things they give out to
encourage the user to use that card. Credit Cards companies don’t like to
compete in lowering their interest rates, so instead they give out free things,
which comes out a lot cheaper than lowering interest rates.
The free thing they give out comes in many different forms, such as cash
rebates. When you make a purchase on any item, you will get 1% on
regular purchases, and some offer 3 to 5 percent for buying gas and shopping
at a supermarket. Once you reach $50, they will send you a check, and $250
is the maximum you can earn in a year.
Discount on future purchase (this one is done by stores). The way this works
is, if you sign up for a credit card at the store, you will get discounts on
future purchases. And bonus points for using the card, which you can
get a gift certificate.
Frequent Flyers - You get miles for every dollar you spend, which will
result you getting free trips, and upgrade your seat. But don’t think that the miles
mean, the number of miles it can fly to. For example it doesn’t mean if you have
5,000 miles, you can fly 5,000 miles anywhere in the United States, it can take 45,000
miles to fly to some part of United States. The miles you get are usually worth few
cents for every dollar. A lot of airliners are getting strict, if your account is inactive,
you will lose your miles. Also remember, you need to make sure to book in advance.
Point Reward - For every dollar you spend, you will get one or two points.
Once you reach a certain amount of points, you will get free merchandise,
which ranges from free tickets, DVD to electronics. Some even offer free nights
at a hotel or upgrades.
When your using your credits card, you can be more organized financially.
You will have a complete record of everything, which can be very helpful
during tax time.
You can dispute items with credit card. If you purchase something
over the Internet or phone, and you never received it, you can dispute it, which
will result you getting your money back. You can't do that with debit card or
checks.
Increased credit rating - when you use your credit card and pay your
balances on time, this will help you build credit. When you have good credit,
you can get good rates on mortgages, auto loans etc . . . But if you pay your
payment late (more than two to three months late) it can lower your credit score.
Many credit card have extended warranties on some purchases. If you break
your purchase or someone steals it, and if you still have the original receipt, the
credit card will repair or replace the item for you. But they do have complex
rules, which is time consuming, such a getting police report, estimate on item,
filing out paperwork, phones calls, etc..
