Let’s all express a modicum of gratitude.
- Some people will tell you that credit cards are bad news.
- There are plenty of benefits to using credit cards that consumers can enjoy.
- Credit card users can earn cash back, save on travel costs, and get fraud protection.
Credit cards are probably one of the more controversial financial products out there. There are some experts who will tell you that credit cards are pure evil and need to be avoided at all costs. And then there are people who make a living coming up with credit card hacks to save money.
The reality is that credit cards have their drawbacks. If you wind up having to carry a balance on yours, it could result in costly interest. And, it could cause damage to your credit score. Plus, credit cards have the potential to lead to overspending, though setting your own personal spending budget each month and tracking your charges can help you avoid landing in debt.
But while credit cards aren’t perfect, they come with a number of features consumers should really be grateful for. Here are four we should all appreciate.
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1. Cash back and other rewards
Many credit cards offer cash back or other types of rewards on everyday purchases. So basically, you effectively get paid for buying the things you need in order to function, like gas for your car and food for your fridge.
2. Savings on travel
Some credit cards — namely, travel reward cards — offer money-saving perks for people who fly often. Many of these cards allow you to check a bag for free, as opposed to having to pay around $35 for that privilege. And since airlines are no longer in the business of offering free meals for domestic flights, your credit card might score you a discount on food and beverage purchases while you’re in the air.
3. Built-in fraud protection
Many credit card companies have sophisticated algorithms in place to detect fraudulent activity on your account. If you live in Montana and someone starts using your credit card to buy gas and groceries in Nevada, that’s likely to raise a red flag. Similarly, if you normally don’t come close to maxing out your credit card limit and suddenly, there’s a large purchase on there that puts you at the tip of that limit, it could be enough to trigger a fraud alert — and stop a criminal in their tracks.
4. The ability to build credit
Using a credit card on a regular basis could help you build credit if you don’t have much of a history, or help your existing credit score improve. A big factor that goes into your credit score is your payment history. If you pay your credit card balance on time and in full every month, that’s activity that will get recorded by the credit bureaus who use that data to calculate your score.
Another factor that goes into your credit score is the length of your credit history. Keeping a credit card account open and in good standing for many years can lend to a higher credit score — and more borrowing opportunities.
Credit cards really are a financial tool to be thankful for. And these perks especially make the case for using them.
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