10 Reasons Why It Could Be A Good Idea To Have A Credit Card

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It’s unlikely that you are one of the tiny minority of UK citizens without a credit card, especially as there are 60.7 million cards out there from the end of November 2009. Despite the national and international obsession with debt of all kinds and the credit crunch, credit cards are still as popular as ever. So what’s the reason for this? There are advantages to having a credit card despite what popular stigma suggests, using one carefully and sparingly can help your finances, here’s ten ways how it can…

1. Convenient: I think we all know how much of a hassle it is when we see something we really want to buy, but have to pop to an ATM first to either withdraw money or check the old bank balance. Credit cards eliminate this chore by providing credit that you can spend then and there. Similarly, credit cards prevent the need to carry large sums of money on your person, so the purchase of more expensive products is easier and in fact safer.

2. By now, pay later: When purchasing items with most credit cards you don’t have to actually physically hand over your hard earned until the bill comes. This is normally a month later, so providing you pay it off in full you’ve had this 40 and 60 day period as interest free.

3&4. Going on holiday? Then get free travel in insurance and other travel benefits: There are many travel benefits you can get with a credit card, many credit cards are recognised worldwide, so booking rental cars, hotels or paying restaurant bills is straightforward. With some card companies you will automatically be eligible for free travel insurance, while other companies will instead activate free travel insurance if you buy airline tickets with that credit card.

5. Budgeting: Credit card statements are much more detailed than normal debit card statements. For this reason, it is easier to determine your spending habits and if they are still manageable in accordance to your income. If for any reason your habits spiralled out of control the previous month, you can use this knowledge to discipline yourself the following month.

6. Cover for the goods you’ve bought: Most cards will also offer purchase protection, so if your purchases are stolen or just lost or faulty they will be covered by the credit card company. Obviously, you will not get this added layer of protection if you paid by debit card or cash, which makes it worthwhile to buy large and/or expensive buys on your card, such as electrical goods, jewellery etc.

7. Shopping on the Internet: The growth in UK online sales is phenomenal both in terms of sheer scale and speed. It seem we all love the convenience and the prices. About 79 per cent of those on the web in the UK purchased something online last year. That’s a lot of transaction. Credit cards offer a secure and simple method of paying for your online shop.

8. Safe and Secure: Credit card companies used highly sophisticated technology to ensure your card is secure and it is you who are using it. Not the same for cash, is it! Fraud is a problem with any type of payment medium whether it be cash, cheques or card – whilst cash has to be the riskiest, credit cards have to be the safest.

9. See your Credit Rating Improve: Paying off your card on a regular basis and sticking to the terms of your credit agreement shows companies you are responsible borrower. This is reflected in your credit file as a record of good payment and so improves your credit score. Having a good credit score helps reduce the cost of any other borrowing you may require such as a loan r mortgage. If you don’t have a credit card you may have a lower credit score than someone who has!

10. Credit without the Interest: With almost all credit cards you will have ‘interest free credit’ as long as you repay the credit spent before the specified due date. Though keep an eye out for cards that charge an annual fee, especially if you’re shopping around for a new credit card deal.

Debi writes for Just Clear My Debts, the UK’s top website for Free Debt Advice and Credit Card Debt resources.

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