Although there are risks to owning one or multiple credit cards, many people decide that the benefits outweigh the risks. In fact, more than 80% of American households have at least one credit card. If people are careful and make sure that they handle credit cards responsibly, pay them off on a monthly basis and don’t overspend their means, there is no reasons why owning a credit card shouldn’t be a positive experience.
Here are five advantages to owning and using a credit card.
- Convenience: The most obvious reason to use a credit card is that they are convenient. It’s easier to carry one plastic card than a lot of bills, and if your card is stolen, you simply call the credit card company, cancel that card and they send you a new one. Although you are inconvenienced, you don’t lose your money. If you are carrying cash and your wallet is stolen though, the money, whether one dollar or one hundred dollars, is gone and there is next to no chance of recovering it. Also, since charges go online or onto a paper statement with credit cards, there is no need to remember to write down purchases and balance a checkbook.
- Purchase Protection: If an item you buy is stolen, lost or damaged and you no longer have the receipt, your credit card statement proves that you purchased the item. If you paid in cash and lose the receipt, there is no way to prove that the item you are trying to replace was purchased in the first place, meaning you are unlikely to be reimbursed because the store has no way of knowing if you are trying to scam them or not.
- Credit Card Benefits: Many credit card offers come with frequent flier miles, reward programs or cash back, meaning the more you charge on your credit card, the more benefits you receive. When you spend cash or use checks, you get the benefit of the money but no more. With credit cards rewards benefits, you can essentially get more for each dollar.
- Emergencies: Even if people have savings and spend their money responsibly, situations can arise that are beyond their control. People get laid off, family members die and car accidents happen, and when they do people need money. With credit cards, you can charge emergency purchases and pay them off later.
- Building Credit: Having good credit history can help you in more ways than getting another credit card. Credit checks are often run when people apply for an apartment, loan, job, buy a car, or in many other situations. Having a credit card and paying it off each month builds a credit score that can help you in many areas of your life.