If you’re looking to improve your credit score, there’s no better way than by using a credit card. It may be tempting to stay away from them in favor of cash or debit cards but trust us: Credit cards have benefits that can’t be denied. In this blog post, you will learn some of the reasons why you should use a credit card instead of cash or debit—and why doing so can help you build better financial habits for life.
Better for your credit score
When you use credit cards responsibly, they can help build your credit history and score. A good credit history demonstrates that you’re able to make payments on time, which is an important indicator to lenders that they should grant you loans or other forms of financing in the future.
If you’re just building your own credit profile, a secured card is a good way to get started—they require no money down, making them easy for anyone to apply for.
Rewards and cashback
The idea of using rewards is simple: you earn them by spending money. The more you spend, the more rewards you’ll receive. And when it comes to cashback cards, these rewards can be used to offset the cost of things you buy—or even for cash back in your checking account.
The best part? Rewards and cashback are almost always offered as a percentage of your purchase. So if you’re planning on buying something anyway, using credit cards with rewards or cashback will allow you to get even more out of each transaction!
Ease of use
What could be easier than using credit cards? No need to carry cash, no need to carry a checkbook and you can use it pretty much anywhere in the world.
You can use your card at millions of locations worldwide. From gas stations to department stores, from fast food restaurants to hotels and even car rentals—just about any business will accept payment by credit cards (and debit cards).
SoFi experts say, “You don’t necessarily need a bank account to apply for this credit card.”
Promotional financing options
With promotional financing options, you can pay off your balance in full and avoid paying any interest. But if you don’t pay off your balance in full, then the card issuer will start charging you interest on the remaining amount. As a result, promotional financing options are often temporary or limited to a specific time period or amount of money.
Another advantage of using credit cards is that it protects you against fraud. For example, if someone steals your card and makes unauthorized charges, most credit card companies will reimburse you for the charges. All in all, this means that if someone steals your wallet and uses your credit cards or checks to make purchases, you won’t be out any money—and may even get some back!
Using credit cards is one of the easiest ways to purchase, but they are also one of the most expensive ways to pay. The best thing about credit cards is that they give you extra time to pay for your purchases at no interest rate, but if you don’t pay off your debt before it’s due, then you’ll end up paying interest on top of everything else! So that’s why it is recommended to use a credit card only when it makes sense.