Credit Card Services
Most people find it difficult to go through life without a credit card. Whether it’s to cover an emergency expense or pay for an online purchase, a credit card is almost essential in today’s economy. Aside from their convenience and the increased purchasing power they provide, they can also play a vital role in improving your personal finances when used responsibly. Here are five ways how a credit card can enhance your financial picture:
Better Cash Flow Management
Studies show that people who use cash tend to spend outside of their budget more often, and check writers can be prone to mistakes in tracking their balance. Using a credit card to pay for budgeted expenses provides real-time tracking capabilities through online account management requiring one simple payment each month.
Build your Credit Score
Your credit score can directly affect you borrowing costs, including the loan rate on a mortgage refinance and the annual percentage rate on your credit cards. The most heavily weighted factor in your credit score is your payment history. Keeping your history fresh with continuous credit activity (and on time payments) can help your credit score.
For your Protection
Perhaps the best reason to use your credit card is for the protection it provides, such as fraud protection, identity theft, extended warranties, purchase protection, and return guarantees. These can be especially important when purchasing big ticket items and electronics.
When you’re traveling you get extra protection such as travel insurance, lost/damaged luggage insurance, roadside assistance, and trip cancellation insurance (not all of these benefits are available on all credit cards).
You Can't Replace Cash
We have all lost cash at one time or another – and for the unfortunate ones among us who lost a wallet with a bundle inside, the lesson is clear: Don’t carry cash. Credit cards can be replaced within a day, and your liability is limited to just $50 (many credit cards will reduce your liability to $0).
Automate Your Life
Sure, you can have certain services and merchants take automatic deductions from your checking account; however that could be fraught with danger (i.e., overdrafts, fraud, errors). With your credit card, you can set up automatic billing with many services and merchants and have the protections that go along with it.
Most banks offer either a Visa® or MasterCard® credit card. Both provide the purchasing power you need to manage cash flow and expenses along with the convenience, security and global benefits they both offer. Visa® and MasterCard® cardholders enjoy all of the added benefits and protections, such as zero liability on lost or stolen cards, emergency card replacement, fraud monitoring and alerts, extended purchase protection and travel insurance.