Credit Cards - Advantages
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1. Free credit if used correctly
- Most Credit Cards don't charge an annual fee, although some are starting to levy them
- If your provider wants to charge you an annual fee consider taking your business elsewhere
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2. Spend now pay later
- If you pay off the full balance at the end of the month then you've earned 'free' money because Credit Card bills are settled about a month in arrears, the so-called grace period
- Time your purchases right and it's possible to get up to 50-60 days of interest free credit. See - How Credit Card APR works
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3. Purchase Protection
- Buy some faulty goods with your credit card and they'll normally be 100% insured for a specific period. Insurance also sometimes offers cover if the item is lost or stolen
- It is important to check to see what cover is available because some Cards are far better than others, with some companies offering no protection at all. See - What is Section 75 and how it protects credit card purchases
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4. Loss Protection
- Get far more security for paying for goods with a credit card than with cash
- Should your card be stolen it just takes a simple call to your provider who will put a stop on it and issue a new card. See - Your rights to compensation
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5. Use a card to rebuild your Credit Rating
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7. 0% Balance transfers
- These enable you to transfer a balance from one Credit Card to a different one that perhaps is charging less interest, usually for a specified period of time
- Note there is a one-off fee charged, normally 2.5% - 3% of the amount being transferred
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8. Free travel insurance
- Often when you buy an airline ticket or a holiday using your credit card you'll get free travel insurance
- Always check what's on offer with your individual Card as the insurance offered is normally not as comprehensive as if a separate stand-alone policy is bought
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9. Travel Advantages
- Spending money when abroad via a credit card is normally far cheaper than using cash obtained from a cash machine, but it can still be expensive if you don't have the right card -
- Also, when you use your card abroad there is the added bonus of protection should the goods be faulty or lost
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10. Monthly Spending Analysis
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11. No plastic = No sale
- Many purchases these days such as Car rentals or Hotel bookings won't accept your business unless you have a Credit Card
- You can of course always settle your bill in cash but the Card is needed as a deposit
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12. Points (and Rewards) means prizes!
- Many cards offer cash back or points such as Airmiles or gift vouchers
- These often are not that much of a selling point if you spend only a few hundred pounds per month but if you're a big spender then reward style cards can be great
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See also
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FREE Report
How to Audit your Credit File
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With errors your rating will suffer
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How a clean credit rating can save you money
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4 steps to a clean up any mistakes |
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Don't discount the importance of your credit file
It's absolutely critical.....
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Get the FREE report |
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Read more in the Credit Cards section:
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