credit card


You might find it impossible to imagine your life without a credit card and your belief is backed up by the statistics. According to research carried out by Experian, the average American consumer has 3 different credit cards. The question is whether you really need one. So, what are the pros of having one?

Improving credit score

You don’t have to have a credit card to boost your credit score, but it certainly helps to show would-be lenders how you deal with credit on a monthly basis and are capable of handling your finances responsibly. Using a credit card wisely can especially help in cases when you’ve made some bad decisions in the past and desperately need to boost your score. Having a good credit rating is, of course, necessary for many reasons from renting a home to some job applications.

All credit agencies recommend that your credit file shows a variety of financial products too. Personal loans online are the ideal way to borrow money when your financial situation is less than ideal. The 100% online application saves you valuable time too.

Protecting your money

If you lose cash, there is often no way it can be returned to you. However, carrying a credit card has in-built security checks in case of its loss or theft. Federal law specifies that you are only responsible for the first $50 of unauthorized activity on your credit card. However, many card issuers will extend this protection so you might not owe a cent if a fraudster uses your card to rack up debts.

The credit card issuer will also help you if you have a dispute with a retailer about the non-delivery of merchandise or if it bears no relation to what you ordered. You are much more likely to get a replacement or refund with their support.

Ease of purchasing

Making purchases on the internet can be much easier with a credit card and unlike debit cards, you’re protected if it’s used fraudulently. In-store purchases are also much simpler when paying by card. If you need to make a large purchase, some stores allow you to spread payments over several months by card which can help your budget.

Source of emergency cash

Although we try to budget, sometimes our financial planning doesn’t go the way we want. It can be derailed by the breakdown of your car or a home appliance. In such cases, you could go to a website and look around for the best loan, but as it’s an emergency, you probably need the problem to be resolved immediately. This is a prime example of when a credit card can be a life-saver.

Booking a hotel or renting a car

It can be quite problematic for you to book a hotel room or hire a car without a credit card. This is because they will make a note of your credit card number in cases when damage to the room or vehicle has been spotted after you leave. Companies will put a holding charge if you use a debit card and the main disadvantage is that this will impact how many available funds you have in your checking account while the charge is imposed. You wouldn’t even notice this amount on your credit card as it wouldn’t appear on your monthly statement.

Reward programs

Most credit card companies have a number of reward programs. It might take the form of points for every dollar spent, frequent-flyer air miles and/or might be a cash back scheme. In other words, you’re being rewarded for doing something you would have anyway i.e. spend money. Although most schemes have a limit on how much you can make, these programs can still give you a little extra and boost your finances.

Business expenses

Using a credit card can be a convenient way to keep your personal expenses separate from your business-related ones and keep track of what you’ve paid before presenting your receipts to be reimbursed.


If you frequently travel (especially abroad), you can take your credit card along to use as your emergency fallback. It can give you greater peace of mind knowing that you have extra cash just in case your plans go wrong.  There’s nothing worse than being in an unfamiliar environment without family or friends and not having any money.

Using credit cards wisely

Despite all of their obvious benefits, credit cards can soon turn into a liability if they aren’t used wisely. Research has repeatedly shown that consumers tend to spend more when they’re putting purchases on a card while others are tempted to overspend at the prospect of earning rewards. Therefore, you should always use your card wisely; try and pay off the balance at the end of the month and not use it unless it’s a genuine emergency.

Credit card stock photo by wichayada suwanachun/Shutterstock