A main use and advantage of having a credit card is having the ability to build a credit status. This is advantageous as the ability to gain a mortgage for a home, or secure finance deals for consumer electronics, home furnishings, or maybe even a car.
1. Fraud
Protection against identity and financial theft is probably one of the biggest reasons why having a credit card, can have benefits. Hectic lifestyles plague peoples’ everyday life, giving less time to plan and think about keeping credit cards in safe and secure places.
2. Payment Protection
Normally companies have protection systems installed so in the event that a customers’ card may become stolen or lost, contact can be made with a persons personal bank to try and reduce any large costs that may incur as a result of fraud. This is usually called a payment protection policy.
3. Warranty Options
Credit cards can serve as a warranty protection method. If a customer decides they want to purchase expensive electronic equipment for home use, then a credit card can act as an insurance policy for that particular item. Credit cards can also be used as a method to extend these warranty periods.
4. Emergency Funding
Many people do not have a constant cash flow; therefore bills can arrive on unexpected dates. Credit cards can act as a way to provide emergency funds in an event of a missed monthly payment, or lack of physical cash. For example, a relative abroad may not have taken out medical insurance to a particular country. Medical fees in other countries are usually higher than anywhere else. Credit cards can act as a bail out for difficult circumstances.
5. Budget Control
All credible banks send out monthly credit card statements outlining outgoings and purchases. This can have its advantages. This statement can act as a reference to manage family budget more effectively. The customer is more likely to adhere to a more strict budgeting strategy. Outgoings can include grocery shopping, college tuition fees, and car finance payments. All of these outgoings are important examples of how budgeting makes living much easier generally.
6. Bonuses with Savings
Increasing amounts of competition between banks means better and cheaper credit card plans available to public citizens. Companies often offer low or no charge on balance transfers, making this an attractive plan to those who use credit cards frequently. Free gifts or cash back bonuses are not uncommon to be used for offers. However, customers need to be aware of hidden charges, as these can be written into credit agreements before signing up.
7. Travel Purposes
Those who travel can use credit cards to claim air miles, cheap rail travel, and discounts at various consumer stores in the US. People who can often manage their financial circumstance tend to benefit mostly from using a credit card plan. Credit cards are of use in events arising such as running out of native currency.
8. Secure Accommodation
Most legitimate and reputable hotels will not accept a room booking without a major credit card registered to the person who booked it. This is so they have security against any damages or additional charges that may arise as a result of stay. Credit cards act as a powerful tool in ordering goods, services, and accommodation.
9. Car Hire
Car Rental is impossible in America without a major credit card. Companies need a reference or guarantee from their customers, that in the event of an accident, they have sufficient cover protection to fix any damages. Further complications such as scratches or empty fuel tanks when returning the vehicle, can be resolved by the use of credit cards.
10. Payment Disputes
Ordering goods from online stores can raise many alarms to harmless consumers. Having a credit card protects potential customers against disputes, or errors in ordering processes. A company can claim customers ordered anything they said if there is no reference point. Debit cards or cash in hand purchases have a disadvantage of having limited protection status.
Conclusion
In conclusion, there are substantial advantages of having a credit card, and few against having one. The main ones being freedom to purchase high cost goods, acting as a fail safe against payment disputes, and managing budgets efficiently. Credit status vastly improves if the customer manages to frequently pay off monthly outgoings.
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