10 Reasons Why It Could Be A Good Idea To Have A Credit Card
It’s unlikely that you are one of the tiny minority of UK citizens without a credit card, especially as there are 60.7 million cards out there from the end of November 2009. Despite the national and international obsession with debt of all kinds and the credit crunch, credit cards are still as popular as ever. So what’s the reason for this? There are advantages to having a credit card despite what popular stigma suggests, using one carefully and sparingly can help your finances, here’s ten ways how it can…
1. Peace of Mind: They offer the security and peace of mind of not having to carry large wedges of cash around in person for starters, which is an advantage when you have to make a large purchase or emergency buy. Best of all, you don’t have to visit cash machine at all to make withdrawals, so you don’t have to run round looking for a machine when you’re pressed for time.
2. Pay later: You will have between 40 and 60 days interest free time period on most credit cards, only paying for items when the bill arrives and not at the time bought.
3&4. Free insurance for when you are travelling plus other added benefits: To attract more customers some of the major credit card companies now offer free travel insurance. Simply owning the credit card qualifies you for this free perk! Credit card companies will often provide insurance when specifically buying a ticket or even a holiday. And when you get to that foreign destination? Credit cards are now widely accepted almost anywhere in the World. Handy for that romantic meal or last minute souvenir.
5. Taking control of your bank balance: Part of managing your wealth and understanding your bank balance is budgeting. Credit cards and credit card statements can help here as they not only give you a total monthly spend (the big number at bottom of the bill) but also itemise your spend. This is handy if you are trying to set and maintain a budget as it gives you a good idea of where cash is going and where you can potentially cut back.
6. Piece of Mind with Purchase Protection: A major benefit of using a credit card is that they offer purchase protection in the event that the goods you have bought are faulty, lost, stolen or in the case of a service, not delivered. Buying using cash or even a debit card does not offer this level of protection. If you are looking to purchase something of particular value using a credit card offers you that extra piece of mind.
7. Shopping on the Internet: The growth in UK online sales is phenomenal both in terms of sheer scale and speed. It seem we all love the convenience and the prices. Nearly 80% of those on the web in the UK purchased something online last year. That’s a lot of transaction. Credit cards offer a secure and simple method of paying for your online shop.
8. Safer: You might have noticed the reoccurring theme so far is security, carrying large quantities of cash around carries many risks of course. Have your money stolen and that’s it, not much can be done, however credit card companies use technology to monitor spending patterns, any breaking in the pattern will alert the card company to suspected identity theft and fraud. If this turns out to be the case your card and account can be automatically frozen in quick time.
9. Improve Your Credit Score: Your credit rating can benefit from a big boost by having a credit card, though it will only help as long as you keep to the terms of your credit agreement. From this your credit report will show responsibility with credit, and it goes without saying, the better credit report you have the better rates you will have access to for mortgages and loans.
10. Credit without the Interest: With almost all credit cards you will have ‘interest free credit’ as long as you repay the credit spent before the specified due date. Though keep an eye out for cards that have a yearly charge, especially if you’re shopping around for a new credit card deal.
Debi writes for Just Clear My Debts, the UK’s top website for Free Debt Advice and Credit Card Debt resources.
