Credit cards are no longer just for the biggest purchases anymore. They’re also a practical tool to manage your day-to mid-term finances, and they come with perks like rewards and travel benefits that make them worth getting. Here’s six reasons why it might be time to get one.,
The “6 reasons to get a credit card at 18” is a blog post that discusses the benefits of getting a credit card. The author also lists 6 reasons for why it’s important to get one before you turn 18.
Many individuals still pay for everything with cash or a debit card, either because they are uncomfortable with using a credit card, don’t understand how credit cards operate, or just don’t want to break their routine.
However, every time you make a purchase with a credit card, you receive something in return – or at least you do if you use the appropriate credit card. Many credit cards provide cash back or airline miles as a reward, while others offer tools to help you pay off debt or finance a significant purchase over time with no interest. Additionally, some credit cards include travel coverage in the event of a problem while traveling, as well as purchase protection in the event that an item you purchase breaks the following day.
There are several advantages to owning a credit card, so 2022 should be the year you ditch your debit card and switch to a card that rewards you for your purchases. With these six reasons to obtain a credit card in the new year, let’s take a look at what you’re losing out on when you don’t have one.
One of the nicest things about having a credit card is that you may earn points on almost every transaction you make. Cash back, travel points, or miles are the most prevalent sorts of incentives, but there are additional alternatives as well.
Merchants can’t charge you extra for paying with a credit card rather than cash or a debit card, and you’ll never pay interest on a credit card if you pay it off in full every month. That implies, if you’re doing things correctly, there’s no need to leave money on the table by using a debit card when a credit card can give you anything for free.
Some credit cards even have “bonus categories,” as we call them. This means that you may earn additional points on specific purchases, such as groceries, food delivery, or even simply filling up your gas tank, every time you use your card.
Although not every credit card has an annual fee, numerous popular cards do, so you must consider the cost of the card against the points or other benefits you’ll get. However, there are a number of highly rated credit cards that have no annual charge and earn points at no expense.
Many credit cards offer huge sign-up bonuses in addition to the benefits you’ll receive on all your transactions. This implies that just asking for a credit card and spending a specific amount of money on it within the first few months of having it (known as a “minimum spending requirement”) might earn you a significant number of rewards straight immediately to get you started in the right path.
Many travel credit cards come with perks that might make your visits more more delightful after the plague has passed. These benefits might range from exclusive hotel status to access to private lounges at airports throughout the globe.
Other credit cards will give you credits when you spend money at particular restaurants or with certain meal delivery services, or when you enroll for a travel program like Global Entry or TSA PreCheck, or when you check a bag with your airline credit card.
You’ll even discover credit cards that give out nightly reward vouchers for free hotel rooms or the chance to travel with a companion at a big discount. So just possessing a specific credit card might give you with an experience you wouldn’t have had otherwise — and perhaps save you money.
Of course, travel credit cards with all of these benefits usually come with an annual charge, which may be rather high. However, if you utilize all of the features, you’ll discover that the value you get out of the card significantly surpasses the annual cost you pay.
If you already have debt from prior credit card or loan use, and the interest on that debt is making it difficult to get out of debt, having a credit card that enables you to consolidate your debt might be the finest New Year’s gift you could ask for.
When you initially receive a credit card, several of them offer an introductory interest rate on balance transfers. This implies that if you transfer your current debt from another credit card or loan to your new card, you won’t have to pay interest on it for a specific amount of time – generally six to 21 months.
This may save you a lot of money depending on how much debt you have and what your current interest rate is. For example, if you’re presently paying 15% interest on $4,000 in credit card debt and move it to a balance transfer credit card with a 0% interest rate for 18 months, you’ll save $900 in interest. Instead of watching that money go to pay interest, you may utilize it to pay down your debt.
You’ll usually have to pay a charge to transfer an existing amount to a new credit card – the current norm is 3%. But you’ll save a lot more by avoiding the exorbitant interest rates you’re now paying on your debt and paying it off sooner.
Some credit cards, in addition to offering promotional interest rates on balance transfers, also offer introductory interest rates on new purchases.
When you initially receive a credit card with an introductory rate on purchases, you’ll pay no interest for a specific amount of time, generally six to 21 months, on everything you buy with the card. That means you may make a substantial one-time purchase, like an engagement ring, and pay for it over time without accruing interest.
One of the biggest risks of having a credit card is getting into debt, so it’s never a smart idea to utilize an introductory deal on purchases to buy stuff you can’t otherwise afford and won’t be able to pay off on time. Because after the promotional period on your new card expires, the interest rate on any remaining debt skyrockets, making it incredibly difficult to pay off.
While using an introductory offer on purchases to spread out the cost of a major expense over time or tide you over for a short period when times are tough can make sense, you should have a plan in place ahead of time so you know how you’ll pay what you owe and only make purchases that you can afford in the long run.
Many credit cards provide a full suite of travel insurance advantages if you’re planning a trip in 2022. These safeguards may protect you if anything goes wrong before, during, or after your trip.
Trip cancellation and interruption insurance, trip delay insurance, lost luggage reimbursement, baggage delay reimbursement, rental vehicle insurance, travel accident insurance, and emergency evacuation insurance are all common travel safety advantages. Not every credit card offers all of these features, and the sort of protection that is most beneficial to you will depend on your circumstances.
For example, if you get unwell before a covered trip and are unable to go as a consequence, trip cancellation and interruption insurance on a credit card may be able to assist you — even if the airline would not refund you for your tickets. For covered prepaid travel expenditures, certain credit cards may refund you up to $10,000 per person.
Hopefully, you’ll never have to utilize these advantages, and in order to be insured, you’ll need to pay for your trip using the appropriate credit card. However, if and when you need them, credit card travel protections may come in useful – and save you a lot of money.
Consider the following scenario: You recently bought a brand-new $600 camera, and three days later you drop it on the floor. Even if it was an accident, the business where you purchased it would not replace it since it was your responsibility. However, if you bought the camera with a credit card that provides purchase protection, your card will pay the cost of repairing or replacing the item if required.
Purchase protection coverage varies widely across credit cards, but most of them will cover you for up to 90 or 120 days from the date of purchase, and for between $500 and $1,000 per item.
You’ll notice that some cards provide return protection in addition to purchase protection. If you need to return an item but the merchant refuses to accept it, this benefit will reimburse you for the entire purchase price less any shipping and handling fees.
Although return protection is a feature that has been phased out of many credit cards in recent years, if you use one, you’ll be protected from any troubles with a merchant that has a tough return policy.
When using a credit card, it is essential to be responsible. Every month, you must pay your account in whole and on schedule, and you must not spend more than you can afford. If you don’t think you’ll be able to maintain that level of discipline, you could discover that utilizing cash or a debit card is your best choice for the time being.
However, if you’re willing to accept the responsibilities that come with owning a credit card, acquiring one and utilizing it may provide you with a slew of perks, protections, and incentives. If you’re not sure which card is ideal for you, CNN Underscored’s Money section is a great place to learn more about credit cards in general, the specific perks of each credit card, and the top credit cards available today.
So make 2022 the year you brush up on your financial skills and see whether a credit card may help you discover a whole new universe.
CNN Underscored has compiled a list of the top credit cards for 2022.
CNN Underscored Money has the most up-to-date personal financial offers, news, and advice.
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The “getting a credit card in college” is a good way to build credit. This will allow you to use it for future purchases without having to worry about your bank account.
Frequently Asked Questions
What are the 6 advantages of credit cards?
A: The six advantages of credit cards are 1) security from fraud, 2) convenience and speed to make purchases online, 3) flexibility when traveling abroad due to exchange rates, 4) the ability for users to divide their balance between different types of spending (such as groceries vs. travel), 5) the option for consumers with bad or no credit history to get a loan if they need one and 6) an emergency fund in case something unexpected happens that takes away your current income
What are good reasons to have a credit card?
A: One of the best reasons for having a credit card would be to use it at stores that do not accept debit or do not even take cash. A lot of people have found some store cards where they get 3% off their purchase, so this can be more than worth it depending on what you buy. Some other good reasons would be if you want to build up points in your account and then redeem them for something; if there is such thing as rewards program that could offer you incentives by using a credit card; or just because everyone has one these days and its easy enough to swipe through everything quickly with ease.
What are 3 good things about credit cards?
A: Credit cards are quite convenient to use when going out, especially during the holidays. They can also be used as a way of storing money and carrying around cash is no longer necessary. Lastly, credit cards have other benefits such as rewards and insurance plans
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