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Advantages of Credit Cards
There are both advantages and disadvantages that come along with credit cards. The truth is that the positives outweigh the negatives and in almost all cases, the disadvantages are directly related and caused by being financially irresponsible or by circumstances out of an individual's control. Below we have outlined the advantages of credit cards. After you finish reading this segment, we encourage you to look over the disadvantages of credit cards portion of our website to help you understand how you can make the below elements work in your favor. Credit cards are a good thing if used properly as you can see.
Online Purchases
If you shop online, which most of us do, credit cards come in handy as they are the preferred method of payment for almost all online retailers. Some do provide Paypal and and other services, but not every merchant accepts payments via Paypal, and you also can't earn rewards for purchases made using their service.
Earning Rewards
With credit cards you can earn rewards on purchases. If you paid for things with cash or checks, or even with your bank issued credit card you'd be paying full price for them. Credit card rewards programs give you the ability to earn points, cash back, travel, or gas rebates.
Building a Credit History
If you pay your bills on time you demonstrate that you are a financially responsible person. Responsible credit card use is one of the best ways to build your credit history and scores which can open up doors for you when you apply for bigger loans, like a car or mortgage. In addition, the stronger your history, the better the pricing you may receive not only for other loans but for future credit cards as well.
Recourse for Merchant Dispute Resolution
If these is a problem between you and a merchant who you've purchased good from and you can't settle the disagreement you may contact your credit card company if the transaction hasn't been processed to hold the payment. If you had made the payment for the goods or services using cash you wouldn't have this option.
National & Global Use
You can travel with your credit card and use it instead of traveler's checks (which are a huge pain) or cash. Credit cards are accepted just about everywhere and from a convenience standpoint there is no better way to pay for things when traveling.
Paying for Things Over Time
Sometimes you need to buy something immediately but you don't have the funds available to do so. With a 0% credit card offer you can buy that necessary item and pay for it in, for lack of a better word, installments, during that introductory period without accruing interest. These types of credit cards can act as interest free loans and are extremely useful during the holidays.
Car Rentals and Hotel Reservations
When renting a car you almost always have to put down a credit card before you leave the lot. Some rental car agencies don't even allow you to use debit cards for this anymore. With hotels, securing your room in advance or for additional purchases once you check in is easiest to do with a credit card.
Safety
Carrying a credit card is a much safer than carrying large quantities of cash. Additionally, in the unfortunate circumstance of a robbery, once your cash is gone, it's gone. With a credit card you can simply call your company and the most you will be liable for is capped at $50.
Emergencies
You never know what can happen. If you lose your luggage when traveling or any other emergency arises you can use your credit card if you don't have access to a bank or if all of the banks are closed. Many people have one particular card designated strictly for emergencies.
Automatic Payments
Most utility, auto insurers, and other companies that you do business with have sophisticated recurrent payment programs where you may automatically have your card billed for their services.
Separating Business from Personal Expenses
Business owners can track employee spending and separate their corporate from their personal spending by obtaining a business credit card. These are particularly useful as they prevent the expensive and often tedious accounting nightmares created by using personal accounts for business purposes.
Protection & Insurance
Many credit card contracts come with additional benefits that protect you for purchases made with the card ranging from travel insurance, damage protection, and even theft.
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