Tips for Responsible Credit Card Use
We have all heard horror stories about credit card debt, and it’s enough to make a person give up credit cards completely. However, those alarming stories aren’t the only results of credit card use. For those who utilize them responsibly, they can be an integral tool in a consumer’s financial toolbox. Let’s take a look at a few ways a credit card can actually help improve your finances.
They can function as your emergency fund.
Financial experts are always saying you should save three to six months of your expenses in an emergency fund, recent polls show that many Americans simply aren’t able to save enough for unforeseen expenses. A credit card ensures that emergencies won’t leave you unable to pay your rent, childcare or other necessary expense.
They safeguard your identity.
If you perceive using credit cards as unsafe, think again. Credit cards are specifically designed with fraud protection that simply isn’t available using cash or even debit cards. If your card is stolen, card purchases can be immediately halted with a simple phone call to the customer service line.
They can improve your overall credit.
This one might seem counterintuitive, but here’s why it’s true. Lenders look for evidence that you pay your debts, so establishing a long, positive credit history will actually contribute to higher credit scores over time. The older a credit card account is, the more positively it will affect your credit score – so long as your history also includes making your payments on time consistently.
Have you been reticent to get a credit card for fear of negative financial impact? If so, it’s time to consider the above benefits. Of course, it’s always best to pay your balance down to zero each month. If you have the discipline to do so, credit cards can be a useful financial tool.
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