Why You Should Have A Credit Card

Credit cards are a better option not only for emergencies but for other options as well. Keep reading for the top reasons for a credit card!

There are more reasons for a credit card than you may think. Of course, you may think that having a credit card is dangerous or irresponsible if you’re used to paying cash for everything. But, the fact is, having at least one credit card is recommended by credit experts.

If you’re considering opening a credit card account but you’re unsure how it will affect you, then you’re in the right place. In this article, we’re discussing why it’s so important to have one. Keep reading to learn more.

Reasons For a Credit Card

Owning a credit card actually has many advantages. Credit cards are convenient to use at merchants worldwide. And, in today’s era of online shopping, using a credit card is the safest method of payment.

Take a look at these major reasons to keep a credit card in your wallet.

Emergencies

One of the top reasons for a credit card is for emergencies. We all come up short of cash from time to time. And we hesitate to use our savings because, well, it’s our savings!

That’s why a credit card comes in handy. If your car breaks down or your dog needs to go to the vet, you don’t have to rearrange your budget in order to accommodate these expenses.

Building Good Credit Habits

Having no credit is just as bad as having bad credit. Using a credit card regularly and making payments shows lenders that you are responsible with your money. You’ll also be in the habit of making monthly payments for those other large purchases you’ll make in life, like cars and houses.

Building Your Credit Score

Paying your debts on time builds your credit score up. Especially if you have a borderline fair to good credit score, you can improve your score by opening a credit card. Use it to pay your bills and then pay it off at the end of each month and watch your credit score grow in a short time.

Track Your Spending

It’s easier to track your spending with credit card usage. Most credit cards offer built-in expense reports on your monthly statements so you can see where you’re spending your money. If you use your credit card for your regular purchases and pay it off at the end of the month, you won’t accrue interest and you’ll be able to budget better.

Fees

Many banks charge fees for using your debit card. You’ll also incur overdraft charges if you spend over your balance. Avoid these fees by using your credit card instead.

While some credit cards charge annual fees, most of those same cards offer incredible rewards to make the fees more palatable.

Balance Transfers

Many credit cards offer balance transfer promotions with low to zero interest rates for the balance transfer. This is a great way to consolidate debt and save money over time.

Cash Back

One of the best credit card benefits around is cash back rewards. Many cards offer this option for your spending. You’ll simply earn anywhere from 1% to 6% cash back on every dollar spent on your credit card.

When reviewing cards, take a look at what type of spending earns you the most cash. Many cards offer double benefits at grocery stores and gas stations, for example.

Rewards Programs

Another great reason to own a credit card lies in the rewards programs. The first credit cards to offer these type of programs offered travel miles for every dollar spent on specific purchases. Over time, more credit card companies have caught on and the rewards are even more diverse.

You can earn hotel points, airline miles, and more. These are great credit cards to use when planning for big vacations and other large purchases.

Fraud Protection

One of the biggest reasons to have a credit card is fraud protection. If a criminal gets a hold of your credit card, at least they won’t have access to your bank account. Also, as long as you notify your credit card company right away, they’ll put a hold on your account and start an investigation.

You’ll never be responsible for more than $50 in fraudulent charges according to federal law. Many credit card companies have a zero-liability fraud policy, so you won’t lose anything.

Purchase Protection

Many credit cards offer extended warranties on purchases for things like furniture and electronics. Not to mention that you can often have charges removed if you return something, even if the retailer won’t refund you for damaged or faulty goods.

Insurance Benefits

You can even find some credit cards that offer additional protection like insurance coverage for your cell phone or computer. Likewise, many offer rental car insurance and travel insurance as long as you use your credit card for the associated purchases.

Universally Accepted

Credit cards are more universally accepted than debit cards, especially if you’re going to be in a foreign country. Likewise, many hotels, airlines, and even restaurants require a credit card for deposits. Credit cards like Visa and Mastercard are accepted worldwide.

Final Thoughts

One of the best reasons for a credit card is the sign on bonus. Many cards offer up to $300 just for opening an account. That’s free money that you can use to keep your balance down or cash in on a splurge purchase!

Only open a new credit card if you’re sure you will know how to use it responsibly. Your credit health is important for big purchases in life. A credit card can benefit these ventures, or hinder them if you’re not careful.

We’ve done all the work of comparing your options for you.  If you have questions or you’re ready to start comparing the best credit cards for your financial situation, feel free to contact us.

Here’s a look at some of the best credit cards in Singapore:

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