Just How Necessary or Helpful is a Credit Card?

While credit card spending has potential dangers, you can actually get a couple of benefits from credit card. Truth be told, wise spending is key to keeping your finances in good shape. It’s not entirely bad to keep one credit card if you don’t overspend and if you don’t fail making payments.


  1. Credit Card Helps Build Your Credit Report

Perhaps the best way to build your credit score is through credit card spending. Most banks and lending companies require a credit report before approving a loan. This means that using credit card is milestone to other loans, telling lenders how well you are as a borrower if you have been able to meet your obligations or not.

To build your credit, apply for just one credit card. Choose the one with the lowest interest and fees. There might be cards that don’t charge annual membership fees, but if you don’t make payments on time and in full, the finance and late charges are insanely hefty, so be careful.

  1. Credit Card Offers a Bunch of Rewards

Sign up bonuses, cash backs, investment rewards, zero interest purchases, frequent flyer miles and redeemable points – these are just some of the rewards that many credit companies use to lure in prospect cardholders. While these fringe benefits may appear rewarding, understand that you can only enjoy them when you keep on using your credit card.

Remember that it’s never wise to use plastic money for all your purchases, especially for things you don’t entirely need and those you can’t actually pay for. Beyond the rewards, be protective of the health of your personal finances.


  1. Credit Card Provides Protection on Purchases

Fraudulent vendors are aplenty online and offline. You don’t have much protection against bad purchases when you pay in cash or through your debit card. However, when you use credit card, you can actually have fraudulent transactions reversed in no time. The credit card company shields you from paying for sham purchases and owns the responsibility of resolving the matter.

If you aren’t sure of the vendor’s trustworthiness, use your credit card for the transaction. This is especially practical for online purchases, where you don’t get to check the products in person and the items are subjected to handling risks in transit.