CREDIT CARD: A MUST-HAVE POWERFUL TOOL

CREDIT CARD: A MUST-HAVE POWERFUL TOOL

Credit cards are one of the best things to happen to humanity. They are a great financial tool that allows the holder to settle bills and to receive cash advances up to a set line of credit. When you have a credit card, to a certain extent, you are covered.

Just imagine yourself going to grocery stores to buy your favorite items. But when the time comes to settle your bill, you are short on cash. Having a credit card lets you buy those items in this situation. That is how much of a difference a credit card can make.

Credit cards are a powerful tool with more significant benefits, but the most important of all is the convenience they give. In this post, I am going to talk about a few things you can do to achieve with credit cards.

A CREDIT CARD CAN HELP WITH CAR RENTALS IF YOU ARE DOWN ON YOUR LUCK

Credit cards can make a great difference in saving you money on car rentals, and on other traveling expenses that you will incur as you plan your trips. For individuals that intend to do lots of personal exploring, there is nothing as good as having a credit card handy when you want to rent a car. Being a valuable asset, the car rental company would want to have an option should you fail to return the car or damage it.

Regardless of the status of your credit rating, having a credit card assures the car rental company that you are a reliable person with a genuine identity, and that you already have been scrutinized by your credit card issuer. It tells the company that you will return the car and that you will be able to pay for any damages that might occur.

If your credit card company provides rental car insurance, you might want to consider relying on that coverage when next you travel. Overall, you can speak with your credit card company and the car rental company to see how the savings can be built upon.

CREDIT CARDS GIVE ACCESS TO CAPITAL WHEN STARTING A BUSINESS

Planning to start your business is great as it gives you the freedom to do things your way and on your own. However, sourcing for capital can be one of the struggles faced when starting a business. Even if financial institutions reject your application for a business loan, you can turn to your credit cards as a significant source of financing.

Of course, it might not be your first option, but credit cards, if managed right, can give you access to capital when starting a business. A recent survey showed that 16% of startup businesses use credit cards to finance their business. On the contrary, having a bad credit score makes lenders think twice before giving you a loan, and you may ruin your business credit score. Therefore, see to it that you are making full, regular, and timely payments and not allowing your debt to go out of control.

CREDIT CARD BUILDS YOUR CREDIT RATINGS IF USED RIGHT

When it comes to repairing or building your credit, it can be difficult to know which ways are effective and vice versa. Whether you have a bad credit score or no credit, using a credit card is one of the most effective ways to build credit scores and ratings. However, most people who set out to repair their credit with a credit card do so with the wrong cards. If you are in a deep financial mess and need to get your financial life back on track, a secured credit card can be a gold mine.

Secured credit cards can be a safe alternative to fixing bad credit. They allow you to raise your credit limit by making additional deposits and reporting directly to the three credit bureaus, which in turn boosts your credit. When used the right way, a secured credit card will act as a savings account for you and will cost you less.

How do you use the card CORRECTLY? Make sure you make payments on time every month. Keep your balance low. Do not go beyond your available credit limit. When a good credit habit is established, your credit rating will ultimately increase. A good rule of thumb is to get the credit card and never use it. If at all you will use it, make sure you do not spend above 15% of your available credit limit.

CREDIT CARDS CAN HELP YOU THROUGH RECESSION

One economic situation that I fear most is “recession.” The mention of the word alone got many people scared. Why? Products and services become expensive, with less inflow of cash.  Businesses are shutting down, leaving many people jobless. If you are careful about spending, you may want to consider several options for reducing your spending. Take it or leave it – Your credit cards may be an answer!

For instance, Cash Back Credit Cards can give you as high as 10% of the total amount spent on your card. Many credit card companies offer these types of cards. Before you choose one, make sure you consider the amount they offer back. You can convert many of these cash back offers into actual discounts and savings that you would not have been able to bargain for if you transact with money.

A gas rewards card is another option. If you are a regular traveler, a gas reward card may be something to have in your wallet. It helps you get something back on your gas spending. If you are a fan of a particular gas station, you may get a discount on the amount of gas you buy via their partner stations. Even when the price of gas comes back to normal again, the card will still be an advantage to you.

GIVES YOU AN EMERGENCY LINE OF CREDIT

If you do not have enough savings or cash to take care of any unforeseen expenses that arise, your credit cards can provide you with a financial safety. However, note that you have to pay back everything you owe.

PROTECTION FROM BANKRUPT AIRLINES

Do you want to buy airline tickets? Make sure you use a credit card. This way, you will be protected from losing money should the airline goes bankrupt. You would only need to request a chargeback through your credit card company.

DOS & DON'TS OF CREDIT CARDS

While credit cards allow you to purchase something now and pay later, you may lose track of the amount you have spent when the bill arrives. Outlined below are a few dos and don’ts of credit cards.

  • Be sure to understand the terms of a credit card before you accept it
  • Keep copies of sales slips to double-check and confirm the charges listed against your receipts when the bill arrives. If you find a mistake or a charge that you did not approve, make sure you quickly report any questionable charges to your card company
  • Subscribe to a credit card plan that suits your needs
  • Do not give your credit card to anyone. Your credit history and privilege are precious to risk.
  • Do not give your credit card details to anyone except you know who you are dealing with. It is better to keep your account details to yourself.
  • Do not forget to sign your card immediately you receive it to prevent other people from using it.
FINAL THOUGHT

Now that you know some of those things that make credit card a powerful tool and how to use them right, you may need to consider finding one that suits your financial needs. Whether you are using credit cards for the first time or you want to take full advantage of your existing one, the most important thing is that you embrace a healthy credit card habit.

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