10 Reasons Why You Should Use Credit Cards
Did you know that your credit cards are more than just a near-endless pocket of money to be swiped? From the moment you sign up for one, you are eligible for all sorts of treats tailored to entice you to spend more. Risk of impulse purchases aside, there are actually several very strong reasons for you to get a credit card as soon as possible, such as:
1. Sign Up Offers and Bonuses
This is often the most attractive reason to own a credit card. Many credit cards offer significant rewards upon approval.
For example, you can get signup bonuses such as gifts and cash worth anywhere between RM50 and RM250 – maybe even more. Other cards might offer free redemption points that can be redeemed for air travel or gift vouchers.
2. Cash-Back Rewards
Image via American Express
A cash-back reward program is an incentive program where a percentage of the amount spent is paid back to the card holder.
If you sign up for a credit card that offers such a reward, you can earn anywhere from 0.5% to 5% back on your purchases. However, most credit card companies set a cap on how much you can earn back every month.
3. Frequent-Flyer Miles
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Almost every airline offers at least one credit card. Cardholders earn points according to the miles flown or the duration of the flight. The price of the plane ticket you pay for after redeeming your points will determine how valuable the credit card reward is.
Frequent flyer cards usually have huge mileage/points sign-up bonuses attached, which are often enough to let you enjoy a free flight after using the credit card for a few months.
Many credit card rewards work based on a point system where you earn up certain points for every ringgit spent. When a certain point threshold is reached, you can redeem your points for items offered by the credit card company. Some even allow you to redeem the Government Service Tax which is charged to your card annually.
Image via Perspecsys Photos
With today’s fraud detection system, paying with credit cards makes it easier for you to avoid losses from fraud. When your debit card is used fraudulently or when your cash is stolen, the money will be lost instantly.
In contrast, when your credit card is stolen or used fraudulently, you just have to notify your credit card company of the situation to block any further transactions. It may take a while for the credit card company to investigate and resolve the matter, and for the fraudulent transactions to be reversed, but at least it won’t be a total loss for you.
If you do not have enough cash to make an emergency purchase, a credit card can come to your rescue. For example, your tyres might suddenly burst or your car might run out of fuel during a long distance travel. When there are no ATMs in sight, paying with your credit card is a stress-free and quick ticket out of sticky situations.
Most people don’t even realise their credit cards automatically come with comprehensive consumer protections at no extra cost, such as rental car insurance, common accident protection, travel and medical insurance.
8. Universally Accepted
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Whether you want to rent a car or book a hotel, you’ll certainly enjoy an easier time paying with a credit card. These companies actually prefer customers to pay with credit cards too because they are able to protect themselves in case of any damage caused to their vehicles or room.
Without a credit card, you may be required to pay for one of these items’ deposit in cash or with a debit card. It is also extremely useful when you’re travelling overseas, but always remember to inform your credit card companies beforehand to unblock any purchases in your destination country.
9. Credit Building
Using a credit card responsibly will help to boost your credit score because it will determine the types of loans you qualify for and the interest rate you will pay. Debit card and cash usage on the other hand, do not appear anywhere in your credit history, so they can’t help you to build or improve your credit score.
10. Get Great Discounts
Image via Asia-bars & Restaurants
Some credit cards offer discounts and special offers all year round. As long as you spend within your limits, taking advantage of these discounts and offers for dining, petrol, entertainment and shopping could help you save even more.
Credit cards make it easy to pay for purchases anytime, anywhere, and when used smartly, it will help you qualify for other credit-based programs in the future – in other words, they improve your credit rating. Exercise prudence, and the credit cards will work for you.