Four Situations Where You Should Use Your Credit Card
15 Sep
Racking up plenty of money on unneeded purchases with your credit card is very easy to do and spending on your card can be really costly if you fail to pay in full each month. But, plastic can still allow you to build credit, gain reward points, and limit risks on bad purchases.
Credit cards aren’t inherently evil. They do provide a useful service for people. However there is a shared responsibility between consumers and credit-card issuers. Consumers should use credit wisely, and know if they can afford what they buy. In the meantime, credit cards issuers should give consumers a square deal, without tricks and traps.
These are four situations where you should use the plastic:
1. Ordering online or making major purchases
Lenders often say credit cards can protect people when making major purchases. With a credit card you have bigger leverage to return an item than you would when using cash. Card issuers will step in to help you settle your issues. If you sense a problem, you should call your card company and it will put a hold on your purchase. Credit cards can be practical when people order products. If you can’t get the items you were promised, it is possible to get the charges reversed really quickly.
2. When traveling
A card is safer than carrying cash during a travel and they are also essential because many companies related to tourism industry (restaurants, hotels, airlines, etc) only accept credit card. Some credit cards have special arrangements with hoteliers, food and beverage outlets and transporters so that the cardholders can get a discount when charging their card for such expenses.
3. When purchasing necessities
Credit cards also can be practical in emergency situations, for example a medical crisis. Many times what we consider as essential, really isn’t too essential, but if we are sick, and you don’t have insurance or money, then paying medical bills is a good enough reason to charge a credit card. Charging on something that could be considered an investment, such as college textbooks or stocks may also make sense. Still, people should be wary of justifying the use of credit cards based solely on the hope and expectation of future profit. The problem is that monthly payments come due rather quickly, and it would be quite costly to pay the interest in just five years.
4. When you have a budget
Statements from credit cards may help with budgeting. People can put together their monthly budgets based on their expenses in the previous year. Most lenders have services to track spending. It’s fantastic when you can gauge your spending by reading credit card statements.
