Credit cards are convenient and secure.
They make budgeting more manageable, and they can even earn rewards. And no, you don’t have to go into debt, and you don’t have to pay interest. Many of us use credit cards irresponsibly and end up in debt.
However, contrary to popular belief, if you can use the card responsibly, you’re much better off paying with a credit card than with a debit card and keeping cash transactions to a minimum.
Credit cards can offer cardholders convenience, security, rewards, and the opportunity to build a healthy credit history. They also require taking a risk: the tendency to overspend poses a risk of falling into rapidly-accruing debt and additionally risks damaging personal credit history.
Credit Cards Are Safer To Carry And Use
If you lose your wallet or get robbed, any cash you carry is almost certainly gone forever. It may take some time to sort out the resulting mess, but you won’t lose any of your money. However, if thieves go on a spending spree with your credit cards, you generally won’t be held responsible for fraudulent purchases.
Bonuses and Rewards
Earning welcome bonuses and rewards through credit cards is an appealing part of applying for and using credit cards. Cardholders should take care not to ‘churn and burn’ cards simply for the bonuses, as this is often a red flag to future lenders.
Credit cards with a hefty welcome bonus typically require a higher than average credit score and substantial credit history. New cardholders can earn tens of thousands of points after spending a predetermined amount within their first few months of holding the card. These points can often be redeemed for travel, dining, hotels, car rentals, cash or everyday purchases.
Most credit cards automatically come with many consumer protections that people don’t even realize they have. This can include rental car insurance (though often secondary to your personal auto insurance), travel insurance, and product warranties that may exceed the manufacturer’s warranty.
Electronics And Appliances
Not only is it a great idea to purchase big-ticket electronic items on your credit card because you can rake in the points, but many credit cards also provide some insurance on these items when purchased using a card. The most common of these insurances come in an extended warranty, often doubling the length of time the manufacturer provides.
Perhaps the most important benefit to owning and using a credit card responsibly is building a healthy credit history. It isn’t easy to construct substantial credit history without a credit card account or take out a loan with requisite monthly payments.
Having at least one credit card long-term lets lenders know if you’re likely to be a risky borrower.
By making payments on time and keeping credit utilization low, it’s possible to show them that you won’t be. This is especially important when taking out a mortgage or car loan.
At Okinus Credit Solutions, we strive to empower our customers by helping them buy the products they need while building back their credit at the same time. To learn more about our lease-purchase program, fill out our application online, or call us today at 844-450-0221 for more information.