With the advancement of digitalization, the use of plastic money has increased tremendously. Individuals are now resorting to plastic money for numerous purposes such as shopping, making online purchases, and paying utility bills, among others.
A credit card, in particular, allows you to perform a series of financial transactions easily. Besides, it serves other purposes such as building credit, fraud protection, and emergency usage, among others. You may explore the numerous benefits of such an instrument and opt for one at the earliest.
Following are six reasons why applying for a credit card is a good financial decision.
To build credit
Many individuals have a pre-conceived notion that such a card adds to your financial woes. However, the truth is that it helps you build your credit score through regular repayments. Every time a bill payment is made, the information is stored as a part of your credit history. This is used to determine your creditworthiness. By showing your responsibility towards making timely repayments, you may build a good credit score.
Acts as an emergency source of funds
There may be times where you may need funds for a dire emergency such as unexpected medical hospitalization or vehicle breakdown. If you do not have an emergency fund in your savings account, you will be unable to meet your expenses. A card helps you get the money you need without having to borrow from friends or family.
Benefit of rewards
Banks provide a plethora of rewards and offers on your card. Based on your choice, you may choose from various options such as cashback cards, reward cards, high-value cards, commercial cards, and low fees cards. Such offers allow you to save extra on dining, movies, lifestyle, travel, shopping, and much more.
Safe and secure
Plastic money eliminates the need to carry a large sum of cash around. Carrying cash makes it prone to theft or loss. A credit card is a safer and convenient option. If your card is stolen or lost, you may simply call the bank’s helpline number and request them to block the card. This prevents any unauthorized use of your card.
Helps in budgeting
You may request a monthly statement on your card spending. Once you receive the monthly record, you may analyze your spending habits. You may try to curtail unnecessary expenses based on your financial situation. This will help you make smart financial decisions.
Overseas use
Some cards allow you to make purchases in foreign currency. Though currency conversion fees may apply, it is a great instrument to shop overseas or to make financial transactions in a foreign country. Besides, it eliminates the need to convert physical cash.
A credit card is a great tool if used wisely. You may, therefore, opt for such a card and enjoy the numerous benefits it has to offer.