According to "The 2008 Survey of Consumer Payment Choice," 176.8 million people in the United States owned credit cards in 2008. Credit cards are a convenience for some and a necessity for others. Either way, they are an established method of payment for many. If you use your credit cards responsibly, by paying them in full and on time every month, they have a number of benefits.
Safety
It is safer to carry a credit card than to have a large amount of cash in your wallet. If you lose cash, it is impossible to replace it and you have lost some of your ability to make purchases. If your credit card is lost or stolen, you limit your liability as soon as you report the loss to the credit card company. The company will issue a new card, so your buying power remains the same.
Credit Rating Improvement
Credit bureaus base part of your credit rating on how you handle your credit cards. If you pay the full balance on your cards and pay on time, your credit rating can go up. A good credit rating can have a positive effect on your insurance rates and interest rates on loans.
Convenience
Credit cards can help you use your time efficiently. Having a credit card can make a trip to the bank or automated teller machine (ATM) unnecessary. Buying online or by phone instead of traveling to a store is a time saver and merchants who do business electronically usually require payment by credit card.
Grace Period
Credit cards offer a grace period, sometimes called a "float." This is the time between a credit card purchase and the date the credit card bill is due. If you have no balance on your credit card when you make the purchase, you pay no interest on the charge. This is like a short, no interest loan. If the money you would have used to pay for the purchase is in an interest bearing account, the float allows you to earn interest on that money.
Incentives
Many credit card companies offer special benefits to their users. Some cards provide an incentive for use, such as cash back, discount programs or other rewards. Many cards offer purchase protection, a service that will replace or provide refunds for defective items purchased with the particular card. Others give discounts and special services, including travel assistance or early access to event tickets.
Emergency Assistance
Problems crop up, unplanned and unforeseen. It may be a leak in the roof, a sudden medical expense or an unexpected car repair, something of importance you need immediately but cannot pay now. Credit cards are useful at times like this, providing a solution for the problem and time to arrange different financing.
0 comments:
Post a Comment