The Many Benefits of Credit Card Use

Racking up excessive debt on credit cards is easy. For that reason, many personal finance experts encourage people to avoid using them.

It is true that credit card debt is common and that it creates a tremendous amount of stress. However, if used in a responsible way, credit cards are actually quite advantageous.

The Positive Side of Credit Card Use

  • Restoring Credit – By using credit cards wisely, you have the opportunity to increase your FICO score or, in the case of having little to no credit, you can establish yourself as a creditworthy consumer. With responsible use, you can secure a standard interest car or mortgage loan, even if you filed for bankruptcy only a few years prior. The key is to get involved with a credit improvement program. Interestingly, this program wants you to use credit cards, just responsibly.
  • Investment Opportunity – A great way to save money while investing at the same time is to choose a cash-back credit card that deposits the money earned directly into an investment account.
  • Cash Back Offers– The market is flooded with all types of cash-back credit cards, with those offering between 1% and 5% back being the best. Instead of paying full price for purchases, you enjoy the equivalent of a nice discount by using this card.
  • Security – Unexpected financial losses occur all the time. To keep your finances secure, choose a credit card with excellent safety features. When it comes to fraudulent activity, there are distinct differences between a debit card and a credit card. With a debit card, the money comes out of your account immediately. Even if the bank has a guarantee, it will take time for the money to be repaid. With a credit card, no money is taken from the account. The only way that you will know that some kind of fraud occurred is by receiving a notification from a company representative.
  • Frequent Flyer Mileage – Most major airlines have at least one credit card offer. By using that card to purchase airline tickets, you earn frequent flyer miles. The accumulated miles can then be used for free trips and other perks. Keep in mind that the exact value of the card depends on different factors, including specifics of the card itself, the airline tickets that you use, and so on. If you travel often, comparing different credit cards is highly beneficial.
  • Insurance – If you are not already aware, most credit cards feature some type of consumer protection. This is seen in the form of insurance for rental cars, travel, and more. Because the actual type of protection and the dollar amount covered is unique to each card, you should make comparisons.

As indicated, when credit cards are used in a responsible way, they are extremely beneficial. To maintain good credit but also avoid late fees, higher interest, and other financial penalties, be sure that the card’s full balance is paid off each month.

If you struggled with credit card use in the past and are now in serious debt, you can always get a fresh start by filing for bankruptcy. To understand how bankruptcy will affect you, and also learn about other potential solutions, we invite you to talk to one of our Oneida bankruptcy attorneys today!

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