Top Reasons Why You Need A Credit Card

A surprisingly small number of people thoroughly research credit cards online or make the switch to credit, despite the fact that there are numerous savings to be made and benefits to be reaped from having a credit card.

You may wonder how many credit cards is too many? The answer to this depends on your financial situation, however, having a single credit card is also advisable to boost your overall credit rating. 

7 Reasons Why You Need A Credit Card

1) Peace of Mind

Credit cards provide you with peace of mind as they often come hand-in-hand with additional consumer protection. Thus, if you make a faulty purchase on the card, you can contact your lender in order to obtain financial compensation in most instances. 

2) Free Borrowing

Finding the right credit card is an incredibly cheap way to borrow money. Whether you are waiting for a pre-existing debt to clear or you want to build your score, you can borrow money interest-free for over a year with most credit cards that offer 0% on purchases. 

3) Earn Free Money

Numerous credit cards provide you with rewards for using them, either with points or money that can be used to buy anything that you desire. These cards provide you with rewards or even cash rewards for using them, so why would you use a debit card to make your purchase instead?

4) Better For Use Abroad

Many credit card providers will provide you with extra consumer protection while abroad. In this sense, using a credit card abroad can save you an abundance of money. Whenever you are using the right type of credit card abroad, you will not have to pay commission and will obtain the best exchange rate by proxy. 

5) You Will Build A Good Credit History

Having a good credit report will inherently ensure that you are able to buy a car, or a house, and obtain the best rates of interest on your most prized purchases. Having a bad credit score prevents you from getting anything that you are unable to pay up-front for. Thus, getting a credit card and using it as sensibly as possible is the best means of building a strong credit record or rehabilitating a poor credit history. 

6) Free Insurance

Some credit cards will come alongside purchase protection for a short period of time after you have made a purchase.

This inherently means that if the item that you’ve purchased becomes lost or stolen, you will receive your money back within a set period of time. 

7) Financial Protection

If you lose a wallet filled with cash, the chances are that you will never be able to get that money back. However, if you lose a credit card, you will not be liable for any money that is spent on it thereafter.

You should ensure that you are reporting the loss promptly and swiftly while being meticulously careful with your pin. This is because most credit card companies will not pay out if they can prove that you have been negligent with your card. 

How Do I Choose The Best Card For Me?

In order to save thousands of pounds, you will need to choose a credit card that is likely to save or make you the most money overall. However, you should note that you are more likely to be accepted for some cards than others. It is not easy to understand how much you will save or which cards you will be accepted for either.

This Is why it is important to use a credit card comparison service as these use advanced technology in order to match you to the best credit card for your individual circumstances. These will also often show you which companies are most likely to accept your application.

What Are The Different Types of Credit Cards?

The two main types of credit cards are balance transfer cards and purchase cards. The former is the card that is used to cut the interest on any existing debts that you may have. With these types of balance transfer credit cards, you will be able to move any debts that you have accumulated on other credit cards in order to enjoy a 0% interest period during which you can consolidate your debts.

However, it is worth noting that these cards are not entirely free as there are balance transfer fees to take into consideration upon moving your money.

These fees are usually 2-3% of your overall transfer balance. Some balance transfer cards charge far higher transfer fees than this, so you should do your research prior to transferring your balance to another card.

In comparison, purchase credit cards are far simpler to understand. These credit cards are the best for cheap shopping excursions.

With a purchase credit card, you will be provided with an interest-free period for numerous months which allows you to spend without accruing additional interest regardless of whether you do not pay back your balance in full every month.

This is the best card to use if you want to spend a substantial amount of money without paying it back immediately.

In order to clear your balance prior to this interest-free period running out, you will need to ensure that you keep your finances in check overall.

Conclusion

To conclude, this article has outlined the numerous reasons why you should own a credit card. Credit cards can provide you with peace of mind in regard to the transfer of debt and they also provide you with the opportunity to spend large amounts of money that you do not need to pay off in full with immediacy.

Having a credit card also helps to boost your overall credit score, providing you are making prompt and regular repayments each month. You should research thoroughly into the credit card company of your choosing prior to taking out a credit card with them as you will save yourself a vast amount of hassle by doing this. I hope that you have found this article to be insightful and informative. Thank you for reading.

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