When you're trying to get out of debt, get back on financial
track, or recover from bankruptcy, chances are you listen to the
experts. The experts will tell you things like:
- Pay only with cash
- There is no such thing as responsible credit card
- If you use credit cards, you will never get back on track.
Well, I am here today to tell you that that IS a
responsible way to use credit cards.
In fact, there a lot of advantages to using credit cards!
Credit card usage is not only the responsible thing to do,
it can help you get ahead in your financial life - as long as you
can use credit cards responsibly. Knowing your limits is
the key to reaping the benefits of using credit cards.
Here are some of the benefits of using credit
when you use a credit card, assuming you use it responsibly, of
course, you build your credit. As your credit score climbs
higher, so does your position in the eyes of banks. So,
if you were to go apply for a mortgage, the higher your credit
score, the lower interest rate your mortgage would be.
And, a lower interest rate means lower monthly
This is my favorite benefit of using credit cards!
Perhaps you've heard of credit card churning as a way to
earn travel rewards? I have responsibly used credit cards
for years, and have found that in an average month, I earn $50
in rewards, on top of the twice yearly new card bonuses I
Easily Track Spending:
Another nice feature of using credit cards is they make
it very easy to track your spending. Mint.com offers a
free service where you can link all of your accounts in one
dashboard, set budgets, and categorize transactions in a way
that you could not if you only used cash. That puts all
of your accounts and budget in one place!
If you haven't been touched by fraud, then I'm sure you
know someone who has. In the event that your credit card
information is stolen, your credit card company protects you
from having to pay for fraudulent charges. If your debit
card gets stolen, your bank can hold you accountable for
transactions you don't make.
Ever rented a car while traveling? Ever booked a
trip and then had to cancel last minute and eat the cost of the
trip? With many major credit cards, trip and rental car
insurance are included in the benefits of being a
My husband got a new phone, and 2 months later cracked
the screen. The cell phone manufacturer wouldn't cover
it, because the damage was accidental, but our credit card
company did! In most instances, with most credit card
companies, accidental damage is covered up to six months after
items are purchased - and it's not just limited to cell
If you know that you cannot use credit cards responsibly, then
this is obviously not for you. If, however, you love free
money and a bump in your credit score, consider using credit
cards for all of the advantages they provide over cash!
Gretchen Lindow is an Accountant for Hilton Hotels in
St. Louis, by day. When she graduated with her Bachelor's
Degree in Accounting she had $110,000 of student, auto,
and mortgage debt to go along with it. Her family was
surviving financially, but with the impending arrival of
her daughter, and her husband's health starting to fail,
she knew that something had to change. As a result, she
is a freelance writer and blogger at
Retired by 40!
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