5 Reasons Why I Love Credit Cards
Credit cards can be very beneficial if used responsibly. They offer more security, protection, and rewards that traditional debit cards may not offer. I purchase everything on my Capital One Cash Back Rewards card and pay off the balance monthly. So far this year I received $100+ in cash rewards.
If you want to follow this practice be conscious of your utilization rate. My overall credit limit on the card is $7050 and I have never utilized more than 30% of my limit within a month. So if you’re a responsible spender and have financial discipline, I recommend researching some credit cards to take advantage of these reward options. Below are some of the reasons why I love credit cards so much.
5. Rental Car Insurance Protection
If you’re renting a car, most credit cards companies provide some type of complimentary rental-car insurance. So you can save money by denying whatever supplemental insurance the rental company has to offer.
4. Short-Term and Long-Term 0% Interest
If you pay your balance in full each month, you’re essentially getting a no-interest loan for up to 30 days. Credit card companies give you a one month grace period before they start charging you interest on the balance. For example: If I purchased a video game for $60 in October. I can leave that charge on my card and pay it off in November without being charged interest. But if I waited until December to make a payment I would be charged interest on that video game. Additionally, some credit card companies offer promotional 0% intro rates for 6 -18+ months.
3. Cash Back, Sky Miles, Rewards etc..
Credit cards offer several reward options to its consumers. Depending on which category your purchases consist of, you can accumulate sky miles, cash back bonuses, or reward points. You can redeem these rewards and purchase anything you may desire.
2. Fraud Protection
Under federal law, your personal liability for fraudulent charges on a credit card can’t exceed $50. But if a fraudster uses your debit card, you could be liable for $500 or more, depending on how quickly you report it. Some debit and credit cards even have zero liability for fraudulent charges. But the process of disputing these charges is much easier with credit cards.
1. Credit Score
Number one reason I love using my credit card is because it builds up my credit score and history. A good credit score can lead to a multitude of things like lower interest rates and easier loan approvals from bank lenders. Debit cards don’t report anything to the major credit bureaus.