Should I Get A Credit Card? Getting your first credit card is a huge milestone and a big adjustment. You might already have a sense of how credit cards work and how to handle a credit card responsibly, but the devil is in the details.
The credit card is one of the most divisive products among all the financial tools available. Credit cards have widely varying reputations.
Some sing their praises as amazing tools that help people score free flights and cash rewards, all while building a positive credit history. Others warn that credit cards are simply vehicles of temptation that will lead to spiraling, dangerous debt.
What Is a Credit Card?
Physically, a modern credit card is a rectangular piece of plastic, graphite, or a metallic alloy, that identifies a financial account. All contain a magnetic strip on the back, and some contain an RFID chip.
An account number and the owner’s name or business name may be imprinted on the front. Behind the scenes, the card represents a type of financial account.
How Does a Credit Card Work?
A lot goes on behind the scenes of a credit card transaction. When you swipe your credit card to make a purchase, the merchant’s credit card terminal asks your credit card issuer whether the card is valid and if you have enough available credit.
Your credit card issuer then sends back a message stating that the transaction is approved or declined. If it’s approved, you can take your goods and services and go on your way.
If not, you may have run your credit limit dry. Each time you make a purchase, your available credit goes down by that same amount.
Why Should I Get a Credit Card?
Research shows that younger generations are becoming more likely to shun credit cards out of a strong aversion to debt. Essentially, when you buy something with a credit card, you are taking on a short-term loan.
But the truth is, credit cards have become a fact of financial life, and for most people, it’s a smart idea to open at least one account.
That’s because using a credit card responsibly is one of the best ways to build a strong credit history. Something that will help you score the most favorable rates on big loans for cars and mortgages, saving you big money in the long run.
In some cases, credit cards can also help you get approved for renting an apartment or avoid utility deposits because of your payment history.
When Should I Get a Credit Card?
The best time to get a credit card is when you have enough money to pay off any charges you might incur and are responsible enough to pay your bills on time every month.
Of course, if you don’t already have a credit card, you’ll likely face a confounding catch. You can’t get a credit card without a credit history, and you can’t build a credit history without a card. But there are several workarounds.
What Are the Benefits of Using Credit Cards?
With the potential for harm, why even use credit cards at all? Check reasons below;
Credit cards create a barrier between merchants and your own money.
To save hundreds or maybe thousands, you just need to find out which is the card that is likely to save or make you the most money. However, you also need to bear in mind which cards you’re likely to be accepted for.
And there’s the rub. Until now it hasn’t been easy to do either of these things. It’s not easy to understand how much you’d save or whether you’ll be accepted for a card.
Add to that the fact that being declined can hurt your credit rating and we start to understand why people aren’t switching cards – which is why we built our credit card comparison service.
Our advanced credit matching technology is a one stop solution for saving money using credit cards. It will tell you which credit cards you are likely to qualify for and how much money you’d be likely to save in seconds.
The Different Types includes;
Balance Transfer and Purchase
Credit cards are best enjoyed by the disciplined, who can remain cognizant of their ability to pay the monthly bill (preferably in full) on or before the due date.
If you already know how to use a credit card responsibly, shift as many of your purchases as possible to your credit card, and don’t use your debit card for anything other than ATM access.
If you do, the combination of rewards, buyer protection and the value of cash-in-hand will put you ahead of those who pay with debit, check or cash.
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