In the realm of personal finance, credit cards are often peddled as a negative tool that will do more harm than good to your overall financial picture. While things can quickly get out of control for those who dont know how to properly handle a line of credit, the picture is much different for those who are more responsible. Its these folks who truly know how to take advantage of credit, which is why they get to enjoy the perks that come with responsible credit usage.
Why â€œDebt Diggersâ€ Will Never Grasp the Concept of Credit
The major difference between those who understand credit and those who dont is that the folks who are â€œcredit responsibleâ€ know exactly when to use a credit card. They dont use it for lavish purchases or things they dont need. Instead, they use it when it makes the most sense.
Whether youre hesitant to use your credit card at all or you have used it too often and need to cut back, its time for a little refresh lesson on credit card usage. Check out the 3 ideal scenarios below that show you when using a credit card should always be considered. You will also learn why credit is best used in these situations and how it adds another layer of purchase protection!
When youre traveling, a credit card is the perfect weapon to have in your wallet or purse. Many hotels and rental car companies will require a credit card to reserve a room or vehicle, putting a hold on your card. A debit card in this situation isnt ideal, as a hold will seize up useable funds in your bank account.
Credit cards also offer significant protection against fraud in the event that your card is lost your stolen. All you have to do is notify your card company and you wont be responsible for any charges. Lose a debit card, however, and you may be held responsible for any charges if the card isnt reported lost or stolen within a reasonable time frame.
As you can see, traveling with a credit card not only makes sense, but it can also be a necessity to ensure you have a place to stay or a car to drive (if necessary).
#2 Paying for Gas
Paying at the pump is a convenient way to grab the fuel you need for your car and go. Unfortunately, this has created a lot of problems for various bank and debit cards, as some pumps will place a hold on the account for a few days. That means your cash will be completely frozen, unable to be used until the hold is released. There is nothing fun about your money being locked up for you not to have access to.
If youre going to pay at the pump, make the smart move and use your credit card instead. You may even get a little bonus if you have a rewards card, which gives you even more of a reason to put your card to use. Just remember to pay off the balance each time you fill up and the rewards will keep piling up!
#3 Making Purchases Online
Its no secret that the internet is a major target for identify theft and credit card fraud. While that seems like a bigger reason not to use your credit card online, the opposite is actually true. Thats because credit cards essentially offer a level of protection that debit cards and bank accounts do not.
Imagine what would happen if someone stole your debit card number and wiped your account clean? The money would be gone before you could even put a stop to it. The process for trying to recover it would be even longer, leaving you hanging out to dry without a cent to your name.
With a credit card, any suspicious activity or high level purchases are flagged immediately. In some instances, they may freeze your card and contact immediately. Your risk is significantly reduced and your money in the bank is safe.
The world can certainly be a scary place, but you need to do your part to stay safe. Using a credit card will give you that extra layer of protection to increase your confidence to buy safely online without worry.
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