You get many perks
by choosing plastic... Convenience, security,
and establishing good credit are the most obvious advantages of using a credit
card. But there are many less obvious reasons to consider, such as; budget planning,
additional product protection benefits and warranties, travel insurance and more.
Convenience of
plastic: There's no easier way
to make a purchase than by using a credit card. With an available line of credit,
you won't have to deal with the hassle of standing in line at the bank or hunting
for a pen to write a check. You won't get stuck in line counting out change and
you won't have to worry about overdrawing your bank account. Special
rewards: Reward
credit cards are often seen as the ultimate perk to using credit. It has been
estimated that 75% of all credit card offers have some type of rewards attached
to them; typically offering two types of programs: cash
rebates and points-based rewards. Point-based
programs are the least favorable since the items offered in exchange for points
are often over-valued. But airline miles (a form of point program) are great if
you travel extensively. And cash back programs can benefit almost anyone. Creating
healthy credit: Regardless of how you
feel about using credit cards, there's no better way to build and maintain a healthy
credit history. A good credit history is key to buying a new car or getting a
mortgage for your house. Here are several points to be mindful of when using credit
cards to establish good credit: - maintain
credit card debt of less 50% of your limits,
-
make minimum payments on time,
- never exceed
your credit limit.
Budget
assistance: As
odd as its sounds, using a credit card can help you to establish and maintain
a budget. Your monthly statement is an itemized list of how you managed your expenditures
each month. By examining each statement, you can see just where adjustments need
to be made to live within your means. Of course, this means that you need to be
able to pay off the balance each month which is a major part of a healthy budget.
Also, the option of having separate credit cards for home and business expenses
can be beneficial when reviewing your expenses and preparing your financial plan. Some
credit card companies send quarterly or year-end account summaries showing how
you've used your credit card, listing purchases by categories, ie: retail, dining,
travel, etc. These records can often be transfered to your personal finance program
through the companies website. Purchase
protection and warranties: If you're unhappy
with something you bought with a credit card, check with your credit card provider
for an extended warranty benefit-- double or up to 12 months beyond the products
original warranty. Find a lower price? Price protection benefits insure that you
are credited with the difference between your purchase price and the lower one.
Travel benefits: Travelers
are offered many benefits, including; car rental collision damage, cancellation
insurance, and accidental life insurance. Be sure to read for any restrictions
or exclusions that may apply in the terms and conditions. When you're far from
home these additional benefits can be a great comfort. Cancellation
insurance not only covers the full fare when a trip gets cancelled or interupted,
but also covers lost or stolen belongings, medical or legal emergencies for you,
your spouse and eligible dependent children. In addition, your checked bags are
automatically covered. Car rental collision/damage
insurance is another service offered by many credit card issuers if you rent a
car using a credit card. This protection may cover medical, legal, lost luggage,
emergency transportation and translation services. Be
smart: Even with all the benefits, credit
is only an advantage if your dililgent about using it carefully. Review your credit
cards on a regular basis to make sure that they offer all the features that are
in your best interest: rewards, no annual fee, low interest rate, etc. Compare
credit card offers often, as they change frequently. Don't hesitate to transfer
balances to lower apr offers or to apply for new credit cards that will increase
your ability to take advantage of all these benefits.
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