Why Credit Cards Are Important

Every day millions of people sign up for credit cards for a variety of reasons. Some people use them for bills, some to buy clothes, and some just use them in case of emergencies. Some people avoid credit cards like the plague, not realizing the importance of them. Credit cards have become an integral part of our society and many people have come to depend on them. Credit cards have several benefits to them including building your credit, allowing you to make purchases over time, and with the rise of online shopping, credit cards allow you to make purchases online with security.

Using Credit Cards to Build your Credit
One of the best uses of credit cards is to help build your credit. Once you turn 18 you’ll probably start receiving tons of offers in the mail every day. While most people just throw them all away because they figure they don’t need one. Even if you don’t plan on buying anything of significant value at the moment, credit cards are one of the easiest ways of helping you establish and build credit. The key is to use them responsibly. The first step is choosing a single credit card to start out with. Do not stock pile credit cards, this will only tempt you use them all. If you don’t have any established credit yet, your credit limit will most likely be fairly low (which is an advantage for you). Use the card for small purchases that you make regularly such as gas, groceries, or cell phone bills. These are things that you will have to buy anyways so you know you’ll have the funds to pay off the card at the end of the month when the bill comes. Avoid falling into the trap of getting behind in payments and only making minimum payments. This could end up causing the opposite effect of what you’re looking for by hurting your credit.

Making Big Purchases
Credit cards allow consumers to buy items they otherwise couldn’t afford. Instead of paying off items at the time of purchase, credit cards allow you to pay for them over time. You may not be able to afford a $1,000 HDTV but making monthly payments of $100 a month might be a little more feasible for you. And if you’re fortunate enough to have a credit card offering a 0% APR introductory period, you can avoid paying any interest on the purchase as well. Some stores will offer you a store credit card that usually come along with deals that allow you to make purchases over a certain amount and pay no interest for a specified length of time as long as you’re making at least the minimum payments.

Online Shopping
One of the most popular ways to buy things today is through shopping online. E-Commerce is one of the largest growing businesses sectors in the world. With sites such as EBay and Amazon.com offering the same products as brick and mortar stores for less, there are more and more people shopping online. The quickest and safest way to make these purchases is with a credit card. Sending checks in the mail is often a slow process and you have to wait for the check to clear before the seller will even ship your product. Using a credit card for shopping online will give you immediate results. One of the main concerns with using your credit card online is safety. Reputable sites use encryption to protect your information when entering in your credit card number to checkout. Also, a lot of websites allow you to purchase through the payment gateway, PayPal which acts as middleman between you and the website you’re purchasing form.

Traveling
If you tend to travel a lot and don’t want to go through the trouble of dealing with currency exchanges, your credit card will allow you to buy things without cash. Of course this is dependent on where you’re traveling to but most major cities throughout the world do accept major credit cards. You can also avoid currency exchange fees by opting for credit cards instead of cash. However, it doesn’t hurt to carry some cash with you for places that don’t accept credit cards.

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