Do you need a credit card ?
It’s a simple question yet you might be surprise how many people make the
mistake of thinking they don’t want one or need one.
Listed below are some of the many reasons to help you consider getting
a credit card, and help you decide which credit card is best for you.
Why is important to have a credit card?
For majority of people the answer is obvious. Some people still refuse to obtain a credit card, and to understand why is important to have a credit card they must
change the way they think about it.
Financial institution such as banks don’t see it as simple as you don’t ‘want one’
there for you don’t have one. Financial institution assume people without a credit card have bad credit history, and as a result no one wants to give them a credit card because they can’t manage their finances responsibly. Having a credit card in good standing can build your financial credibility.
Managing a credit card by paying off your balance on time can put you in good standing with financial institution and help you create a strong financial personal profile, which has many advantages to you. Strong credit card history is very important if you want to apply for line of credit, car loan, or a mortgage.
Financial institution that lend you money so you can buy your dream house or car need know that you can manage payments. One of the ways they will know is by looking at your credit card history, and if your credit card payments are in good standing.
Which credit card is best for me?
What’s the difference between major credit cards like Visa, American Express, or MasterCard ? And which one is best for me ?
One of the advantage the major credit card have is world wide acceptance, but not all credit card are equal. Different credit cards offer different interest rates, different reward programs, some require an annual fee while others do not.
Most credit card companies have a partnership with other big corporation such as airlines, hotel chains, department stores, retail outlets, car rentals, and many other services. These partnership are set up to encourage you to use the specific credit card at certain location in order to provide you member rewards, discounts or other benefits.
With so many credit card companies choosing the right one may be confusing. Even if you already have one it doesn’t mean it’s the right credit card for you, it can depend of yours spending habits. Choose the credit card that you can take the most advantage of, in other words you can use the most rewards they offer. Shop around, look for the credit card with the possibly lowest interest rate, with low or no annual fee, and a credit card reward program that you can take full advantage of.
How many credit card should you have?
Having multiple credits cards can be beneficial for building good standing credit, as well as helping you obtain something you want back from the credit card companies.
Lets say you’re a person who travels a lot, in this case having multiple credit cards to finance your travel can be beneficial to you, as each credit card can offer a different reward in a different location. One credit card can offer you an extra free night in a hotel you’re staying at, while another credit card can offer a free car rentals with points. Large purchases such as airplane tickets can help you collect ‘air points’ so one day you can redeem them for a free flight. Some credit cards offers extended warranty on your purchase, or even offer yearly cash back incentives if you use the card. Cash back credit cards are a great way to earn money by using your credit card for every day purchases.
For many people one credit card is enough. With one card you can expect to receive and manage payments on one monthly statement, with no confusion. Not managing your credit card responsibly can put you in substantial debt, specially if you own a few credit card.
Should you get a department store credit card?
Many departments store credit cards have a loyalty program. Using the store credit card can get you a discount on your purchases in the store, or let you collect ‘store points’ that can be redeemed as way of payment for your next purchase. With department store cards you don’t have to wait for a statement in the mail to pay your balance. Some of these credit cards offer the convenience of allowing you to pay off your balance at the cash register. With this perk you can use the store credit card to collect the points you want, and pay it off immediately with cash or debit while you’re in the store.
What should my credit limit be?
Many people find themselves asking if they need a $1000 limit or a $10,000+ limit. Fact is, many of us don’t need a very high credit limit, so if you really don’t need it, stay away from raising your limit, if you need it you can apply for it at any time. Credit cards with lower limits are much safer and easier to manage. The big misconception is that if your credit card limit is higher it means yours financial credibility is stronger-this is not always the case. Paying your balance on time is the most important thing, not the amount of your credit card limit. Always try to pay the balance on time and preferably in full so you don’t have to pay any interest.
In emergency situation when you don’t have cash or you can’t use a debit the credit card is an instant solution to your problem. Cash may still be King, but the credit card is a must.
CREDIT CARD SOLUTION
