Benifits and Features of using a credit card

Importance of Using a Credit Card

1. Convenience:

• Carrying of cash is now rare as most businesses accept credit cards thus when purchasing on the internet or even physically the credit card can be used.
• This is complemented by contactless payments and digital wallet integration to make it easier to get things done.

2. Rewards Programs:

• Most of the credit cards are designed to provide bonus based on all spending and this may include cash back, points or even miles.
• These rewards may be used to pay for a specific family’s travel expenses or purchase gifts, merchandise, or even get statement credits.

3. Build Credit History:

• The technique of using the credit card in a smart manner assists in the creation as well as enhancement of the credit rating.
• Credit score is also important in getting an apartment, getting a loan and in some cases even getting a job.

4. Purchase Protection:

• Credit cards usually provide cover for items that are lost or damaged.
• Among the typical bonuses, it is possible to distinguish an option of increasing the warranty period of purchases and protection of the price at which they have been bought.

5. Fraud Protection:

• When it comes to credit card, firms tend to have strong anti-fraud programs in placed.
• Fraudulent purchases can mostly be disputed and the charges retrieved, and the card holder can never be held responsible.

6. Emergency Funds:

• With credit cards, there is an opportunity to have funds in cases of urgent need since one may not have physical cash.
• They can also supply cash advances, but these must be kept to the barest minimum because of the cost charges and interest rates associated with it.

7. Travel Benefits:

• There are a host of privileges that can come with a given credit card and these include; travel insurance, car hire excess insurance, and complimentary access to airport lounge.
• Foreign transaction fees are also omitted in some of the cards making these suitable for international use.

8. Introductory Offers:

• Credit cards also contain what is known as teaser rates which include interest free rates on purchases or on the balance transfer for some six months to one year for example.
• Credit card rewards are effective being commonly in form of sign-up bonuses where one is entitled to earn a large number of points for the given spending within the first few months.

9. Budgeting Tools:

• Features include monthly statements, as well as online tools for monitoring expenses and the accounts’ balance.
• Certain credit card companies group transactions to give the holder information on how the money is being spent.

10. Balance Transfers:

• If a consumer has other credit card accounts with higher interest rate balance can be transferred to avoid being charged high interest.
• There are balance transfers that have low or even 0% introductory rate.

Features of Credit Cards

Credit Limit:

The credit limit is the highest cash value that is allowed to be charged onto your credit card that is dictated by the credit card’s issuer based on the creditworthiness of the cardholder.

Interest Rates (APR):

• The fixed or variable number of once a year rate attached to the purchase of goods, direct transfers to a credit card balance and take of cash advances, respectively.
• While, Variable APR can alter according to the prime rate, they remain Fixed APR all the time.

Fees:

• Popular fees are the minimum annual fees, penalty fees for a late payment, balance transfers fee, and fees for international transactions.
• Still, there are credit cards with no annual fee or the fee is included in the first year of usage.

Grace Period:

A period in between the end of a billing cycle and the due date by which the outstanding balance must be cleared in full to avoid acquisition of interest charges.

Minimum Payment:

• The minimum amount of charge that must be cleared every month in order to maintain an account in good standing.
• It is unwise to pay only a minimum because the interest build up over the period of time.

Rewards and Cashback:

• Reward points, travel miles or cashback that is earned on purchases made within the card’s specified categories.
• There are also the cards with the higher rewards rate on the specific categories such as grocery stores, gas stations, restaurants, etc.

Security Features:

EMV chip, Contactless Payments and Virtual Account Numbers are the feature that makes it secure.
Suspicious activity notifications for your card and the option of freezing your card using the mobile application.

Additional Perks:

AKA – Concierge services, travel/emergency help, Roadside assistance, and Event tickets.
Affiliate vendors and services that provide special prices or other incentives for hosting their products/services.

Responsible Use Tips

Pay on Time: 

At least, ensure that you pay the minimum amounts before the due date if you are afraid of extra charges.

Pay in Full:

It is desirable to pay the full amount due in each month to minimize the interest rate or charges incurred and ensure less credit utilization ratio is used.

Monitor Statements:

Always scrutinize your statements in a bid to smart for any errors or any unauthorized transactions.

Stay Within Limit: 

They having large balance on your credit card is bad for credit score and defeats the purpose of having credit card.

Understand Terms: 

Some credit card companies have hidden terms and conditions that one cannot be abreast of, so to avoid such scenarios, it is imperative to read and understand the credit card’s terms and conditions.