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We are always hearing about the dangers of credit cards and why we should avoid them, but, when used correctly and responsibly, there are many positive aspects to using a credit card. Here are five ways you can use a credit card to your advantage without danger of spending above your means and racking up debt.
You will often find that some credit cards have rewards and perks associated with them. A popular perk is frequent flyer points, or discounts on airline tickets. If you travel a lot, using a credit card for your everyday purchases and bills can mean that you will rack up points to spend on air fares by just paying for groceries.
Credit cards can be a tool for building a good credit rating, if you spend within your means and always make your repayments on time. Paying off credit card bills fully and on time is a great way to build up a good credit rating over time. A good credit rating will mean that you will have a higher chance at being approved for things like loans and rental properties.
Having a credit card will always mean you have the ability to pay for unforeseen emergencies such as car repairs or medical bills. Make sure you evaluate each situation, however, and assess whether it is truly an emergency. For example, really needing a new outfit for an event you have to go to is not worth potentially putting yourself in debt. Emergencies refer to unavoidable costs that must be paid immediately.
Sometimes, a credit card is the only way to make certain purchases while shopping online. You will often find that buying items online will be cheaper than buying in store. In this case, it may be worth using a credit card for these purchases. Do be sure to shop within your means, however. Follow the simple rule that if you wouldn’t a the purchase with cash, don’t make it with a credit card.
In this day and age, many countries will accept payment with credit if debit cards. This might mean that when travelling overseas, you won’t need cash. Using a credit card instead of going through the hassle of withdrawing foreign cash can save you time, and even money, especially if your trip takes you to multiple countries. Check with your bank what kind of exchange rates they have, and of you will be incur any fees when making payments with foreign currency on your credit card.
Beyond Debt is a trading name of DCS Group Aust Pty Ltd. Australian Credit License: 382607. RDAA Number: 1126. PO Box 3074 Newstead, QLD, 4006.
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