Why Use Credit?
October 29, 2020
While using cash and debit cards may seem like an easy way to keep yourself out of debt, credit cards can be useful when used responsibly. How can credit cards help? Read on.
Here are some benefits of using credit cards:
Establish credit history
If you want to borrow money to purchase a car or a house, your credit score is important. Establishing a track record of paying your credit card balance on time helps increase your score. And the longer your cards are open, the more you’ll build your credit history, improving your score even more.
Credit cards are great to use when traveling or when you are running errands as they are accepted by hotels, rental car agencies, restaurants, stores, and more. Some credit cards also offer no international service fees, so you can save 1-3% per transaction.
Another advantage of using credit cards for purchases is the fraud protection provided by the card issuers. If your credit card is stolen or someone finds your card information online, you won’t lose much money since charges aren’t withdrawn immediately, even if the thief starts making purchases using the card. As for debit cards, any money spent on fraudulent purchases will be gone since debit card funds are deducted instantly.
Although you pay interest on any balance not paid in full, credit cards don’t have the overdraft charges or transaction fees debit cards do. While credit cards may have annual fees, the cash back you earn might cancel them out, especially when you pay off your balance each month.
When you use credit cards offering cash back, you earn a small amount of money for each transaction. Over time this amount can add up to a sizable bonus. If you are going to use a credit card to purchase items anyway, why not get paid for it?
MSUFCU’s Visa Signature Credit Card offers cash back of 3% for groceries, 2% for travel, gas and university spending, and 1% on all other purchases. For full details, visit msufcu.org/visasignature.
It can help you build credit and improve your credit score, allowing you to qualify for lower-interest loans, saving you money. If you are able to use credit responsibly, it is another way to build toward your financial goals.
Tags: Learn About Credit, Borrowing Money, Credit Cards