Major Credit Card Advantages

Even though many people will tell you that a credit card is the root of all evil, there are still many advantages to use them on a daily basis. Here are some of the major advantages of using your credit card regularly.

Transaction free of charges

You usually have to purchase a transaction package on your bank account in order to have free transactions. Most of them will allow you for a defined number of free transactions and will then charge you a buck every time you drop your debit card on the counter. Credit cards will allow you unlimited transaction free of charges. In fact, credit card companies charges the store instead of charge the customer for transaction.

Rewards

Several cards now offer credit cards points and rewards. Therefore, you can get rebate on flights or household goods. While I would never take a card based on the rewards offered, I can tell that I am now not paying for movies and coffee anymore

Improve your credit score

As previously mention on this blog, using your credit card on a monthly basis and making your payment on time will help increasing your Fico score drastically. For more information, please read the following post on how to manage your revolving credit

As you can see, there are plenty advantages of using credit cards as a financial tool to improve your overall situation. It’s all a matter of money management and budgeting.

Free insurance

When I bought my 42’ Plasma TV, they wanted me to take the extended warranty of 2 years. The cost of such warranty was $600. Instead, I paid with my credit cards that was give me an extra 2 years to the existing warranty J

Temporary break

If you need a month or two to replace your finance, this could be a great temporary financing tool. Credit cards should not be used to finance day-to-day expenses. However, bad luck happens and you sometimes need a backup plan.

Better protection

Most credit cards will pay back any purchases that were made under fraud or personification. Therefore, even if you get your card cloned, you don’t have to worry too much. They will pay you back and send you another card as soon as possible.

Source of arbitrage

Finally, some of you might have heard about credit card arbitrage. Since some credit card company offer a 0% APR for a certain amount of time (6 months, 9 months, 12 months), you can borrow free money and invest it. It may be interesting, but you must know what you are doing first.

As you can see, credit cards might not be the fruit of evil. If managed properly, they can help improving your financial situation. This is only a matter of personal control