Top 3 Reasons Why You Need a Credit Card

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I’ll admit, credit cards can sometimes be intimidating…

You probably even know someone who has overspent and is now paying the price (plus interest!).

However, when used responsibly, a basic no-fee credit card is nothing to be afraid of. The benefits definitely outweigh the risks, and we’re going to cover the top 3 reasons why your wallet should always have a credit card in it.

1. Build Your Credit History

Nothing builds your credit history faster than having a credit card and paying the balance in full every month.

35% of your credit score is based on “Payment History”. Every time you make a payment on your credit card, the credit card issuer adds that to your credit report. A good tip is to charge something small on your credit card every month (Netflix, a tank of gas, etc.) and then make sure to pay the balance in full. Next time a financial institution checks your credit report they will see you have an excellent history of making payments on time.

15% of your credit score is based on “Length of Credit History”. This means, how long have you had entries on your credit report. That’s why we always advise you to get a credit card as soon as you can so you can start building that credit history!

2. Save Money By Shopping Online

Whether we like it or not, online shopping is taking over.

A website has a lot less overhead and expenses then a big retail shop does. Because of this, they can often offer lower prices then if you shop somewhere locally. Credit cards are the only secure way to make payments online and take advantage of these deals.

If you are concerned about getting “hacked” or inputting your credit card details online, rest assured that your credit card issuer will refund any charges that you didn’t place yourself!

3. Give Yourself Some Breathing Room

A huge benefit to having a credit card is the ability to purchase something you need right now, and make payment for it in a few weeks. Depending on when you make the purchase during your billing period, you may not receive your credit card bill for up to 30 days.

This is very powerful if you need to purchase groceries or other essentials between pay periods. That being said, be careful to only charge amounts to your credit card that you know you can pay when the bill arrives. Don’t fall into the trap of only making minimum payments. Most credit cards charge around 20% interest and that is hole very few can successfully climb out of.

Make the Credit Card Work For You…

A basic no-fee credit card is something everyone should have in their wallet. It doesn’t cost anything to have, and it builds your credit for when you need it in the future.

Remember, use the credit card responsibly and you will gain all the benefits from it!