Many people wonder why they should have a credit card. They are worried that if they have a credit card they will just spend too much or they won’t be able to keep track of their money. But there are some good reasons to own a credit card.
1. Prudent use of a credit card is going to boost your credit score or do any needed credit repair. In order for this to work you must never miss a deadline, always making a timely payment. It is also best to pay your card off in full every month, so do not charge more than you will be able to pay off that same month.
2. When you are on a tight budget, using your credit card protects you against overdraft fees. Most banks charge $30+ for overdraft fees for every transaction if you ever reach a zero balance, even for one dollar purchases. Most credit card companies have online statements that are updated daily so you can see what you are spending and then pay it off all at once instead of multiple times out of your bank account.
3. Get Rewards! Take time deciding which credit card to get. If you are using it just to start building your credit score and plan to pay it off every month, then you might as well get some rewards. Many cards offer rewards such as money back, flyer miles, or store credit.
Credit cards can be helpful in times of emergency. Though it is not wise to incur debt, sometimes it can be helpful to delay payment in full on necessities for a month with the loss of a job or a health incident. There will be an interest fee but as long as you make a payment you won’t get a late fee also.
While there are definitely some great reasons for credit cards you should always act carefully. Credit cards should never seem like free money. Use it as you would a debit card. As a general rule, only buy things with your card that you could buy right then with your debit card.
Eventually, you are going to care about having a high credit score. Whether you’re buying a house, or a car, or something in between, if you are looking for a loan, you are going to wish you had done some work on boosting your credit score. So start NOW.
Someday, probably soon, you are going to need a good credit score. It may be to buy a house, buy a car, or just to look good in a job interview, no matter what for it is a great time to start NOW to boost your credit score. Start NOW.
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