Credit card defaults and debt are two of the most common financial problems that people run into. However, if you learn how to use your credit cards responsibly, they can offer you a ton of perks. Read on to know why you should be using credit cards as opposed to other forms of payment.
One-Time Bonuses
If you have a good/excellent credit score and are looking to sign up for a credit card, make sure to look for one that offers a sign-up (also called one-time) bonus. There are numerous credit cards out there that offer people substantial bonuses for spending a certain amount within the first few months of opening their account.
Cash Back
Cash-back credit cards have become extremely popular in the United States. While Discover popularized the idea of getting cash back, many credit card companies now offer special deals that can get you as much as 6% back on certain purchases. The best of these cards are those that charge low fees and interest rates while still offering a high cashback rate.
Rewards Points
Credit card companies offer rewards to encourage people to sign up for their cards. Usually, the rewards take the form of points issued by the credit card company in exchange for purchases made with the credit card. So, for instance, every dollar spent can earn the cardholder one point; some cards provide bonus points for certain types of purchases. Once the cardholder accumulates enough points, they can be redeemed for merchandise, travel, or gift cards from retailers and restaurants.
Safety
It is much easier to avoid losses due to fraud when you pay with a credit card as opposed to a debit card. When your debit card is used fraudulently, the money is out of your account instantly, and you may be charged insufficient funds fees or have your credit affected by bounced checks or late payments that are not your fault. By contrast, it is easy to resolve matters with your credit card company since the money doesn’t leave your account when a fraudulent transaction is made.
