As our world relies heavily on plastic, it is important to take time out to understand how credit can work for and against us. The many issues surrounding credit card use have been debated time and again, as they benefit the smart user, but become one of the leading culprits for bankruptcy when used incorrecty. Before you start cursing your card provider, it is important to realize that these cards are only as good as how you use them.
Contrary to what many people think, this easy access to short term money can actually do you a lot of good. TotallyMoney explains that credit cards provide us with a secured and convenient way to make our way around town without the risk of carrying wads of cash in our purse. It is on how you use your card which can draw the line between good and bad. As they say, do not let the cards play you, but learn how to beat them at their game.
Here are just a few ways on how you can make smart choices when it comes to your credit cards.
Boost your Credit Standing
A smart way to use your credit card is to use them to create an impressive credit score. By paying your bills on time and spending within your limits, you can build a strong foundation of creditworthiness, which leads to lower interest rates on all your loans. To do this, you need to make sure that you spend within your means, and use you credit cards only when you can afford to pay them at the end of the month. Keep in mind that a good credit score translates to easier loan applications in the future as well as increases your chances in getting pre-approved 0 percent credit cards from competing card providers.
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Protect your Purchases
Experts advise using your card to make big purchases as credit companies offer fraud protection for your investment. When you find yourself disgruntled by the company you purchased from, you can easily withhold your credit card payment under the Fair Credit Billing Act.
Other than protecting your right as a consumer, credit cards are also the safest to shop with, whether its in the real or virtual world. Many credit cards are outfitted with additional features that help protect you from identity theft, especially when making online purchases.
A Credit Card Saves You Time
This may seem simple, but plastic actually saves you time by eliminating the need to count bills and loose change when paying. Swipe and sign, that’s all you need to do.
Use your credit responsibly and you benefit from all the features mentioned above. Many card companies will fall over themselves to offer you card programs with low interest rates and perks like frequent flyer miles. Make the mistakes of buying more than you can pay off in a month and making minimum payments, and you will quickly find yourself in a credit card debt spiral that is very difficult to get out of.