Not everyone should carry around a credit card. If you’re prone to keep debt around, you should probably forego a card. However, if you’re able to pay off your bill in full every month, many benefits can come with carrying a credit card around.
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1. No Need To Carry Cash
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If you grew up in the last century, you could likely remember carrying cash around to make purchases. Money can get lost. Additionally, robbers will frequently ask for money. If you lose cash in such a manner, it’s usually gone for good. Furthermore, it can sometimes be more difficult to track cash payments.
2. Protection
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While you can lose cash and have no recourse, you have protection if you lose a card or have it stolen. You will not be responsible for any purchases made fraudulently on your card. Your liability is zero. Many cards have fraud algorithms, and the issuer will sometimes check with you to see if a purchase is legitimate. If you lose your card, you can call your issuer, and the bank will send you a new card with a unique number in short order.
3. Safer Than Debit Cards
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Both credit and debit cards come with similar protections. However, there’s a significant difference. When you use a credit card, you’re using the bank’s money. If you use a debit card to make a withdrawal and a crook skims it, you could have your account emptied. While you’re protected, it could take some time to file a report and get your money restored to your account. Bills will likely come due during this time, and you could have some serious trouble paying them off. In this regard, a credit card is better.
4. Easy Expense Tracking
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If you’re into budgeting, it can be a challenge to track all of your expenses when you use a check or pay with cash. You can forget to put your purchases into your budget spreadsheet or add them manually to your budgeting app. It’s easy to check your statement online each day or each week to see what you’ve spent. Most purchases will show up as pending within a day. You should be able to remember what you’ve purchased at Walmart or Home Depot so that you can put the expense into the correct budget category. If you find a charge that you didn’t make, you can contest it with your card issuer. Some of the better budgeting apps will categorize your purchases automatically.
5. Great For International Travel
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If you’re looking to carry cash in a foreign country, you’ll have to spend more money. In most nations, you’ll need to exchange American dollars for Japanese yen or British pounds. This transaction will come with fees. Most of the time, these fees will be quite hefty, and airport exchange fees can be some of the worst. If you decide to travel with the right credit card, you might not have to pay any transaction fees whatsoever. You’ll want to check your card to see if it comes with this benefit. It’s also good to remember that some countries like Norway have many vendors that refuse to take cash at all. Others, like Israel, will have vendors that refuse to take cards. In that instance, a card will not be a benefit.
6. Potential Travel Insurance
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Illness can cause fits for your travel plans. Wars and hurricanes can occur as well. This is where another benefit can come in handy. Some premium and mid-range credit cards come with a decent level of travel insurance. You’ll have your flight costs and lodging reimbursed for any covered cancellations. Your card with travel insurance will likely also cover any delays you might experience. If you lose your luggage, your card might help you pay for an outfit to get you by. Carrying a quality card while paying for travel makes a great deal of sense.
7. Another Card Can Help Your Credit Score
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While you shouldn’t hold cards if you can’t pay them off, if you’ve already gotten into debt, it can make sense to get another. Cards will frequently come with introductory promotional interest rates. Sometimes, these rates will go as low as 0%. This can allow you to save money on interest. Additionally, opening a new card for a balance transfer can help you improve your credit. Information from LendVia shows that you’ll have access to more credit while holding the same amount of debt. This will lower your utilization percentage, and the bureaus will like this and usually reward you with a higher credit score.
8. Provide Float
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If you purchase a card, you’ll usually have at least 30 days before you need to pay it off. In some instances, you could have nearly two months. It all depends upon when your statement closes. If your purchase occurs just after the previous statement closes, you’ll have longer to pay. This float can help with cash flow, and it can also allow you to hold your money longer. If you have a checking account that pays interest, you might be able to cash in.
9. Earn Cash Back
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Many cards offer benefits, and one of the best benefits that you can realize from carrying a card is cold, hard cash. Most cash-back cards pay between 1% and 2%. Some will provide statement credits. Others will provide a flexible point of currency that you can use to pay for travel or consumer goods. If you’re already going to be spending money, why not get a rebate? Just remember that it’s possible to overspend if you’re carrying plastic. If you’re tempted, cash is likely a better option.
10. Travel The World
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This is closely tied to the cash-back rewards that these cards offer. A subset of the credit card market offers cardholders the opportunity to earn loyalty points from some of the leading airline and hotel programs around. Additionally, many cards in this market will provide generous bonuses to entice customers to sign up. Do two nearly free flights to the Caribbean sound like a good idea? You might want to sign up for a card that can make it happen.
It’s frequently said that cash is king. However, if you can curb the temptation to overspend with a credit card, you can come out ahead by carrying a lucrative card in your wallet. Some many protections and benefits can make carrying a credit card a winning choice.
