3 Reasons Why You Must Have A Credit Card

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Credit Cards are an enigma. I googled the word enigma and the results yielded the following, “a person or thing that is mysterious, puzzling, or difficult to understand.” What better definition to describe credit cards. A picture of a credit card should be placed right below the word enigma if you were to ask me. Why credit cards are hard to understand is another blog post for another day. The purpose of this post is to highlight three benefits of having at least one quality credit card handy at all times. The following are examples to use when you already have or will soon have the money to purchase what you want. All can be found in my book B.R.O.K.E.: Six Keys to Building Wealth.

Cash Flow Management: One of the biggest advantages of using a credit card is to help with bill payments. Let’s say you are due to get paid on Friday November 1, however you must pay your car note by October 25th. Since you will not be paid until the 1st you will be forced to do one of two things. 1.) Pay your car note late or 2.) Ask to borrow the money. The issue is not that you are unable to pay the car note you just will not receive the funds until several days after you need the funds most. Simply pay the car note with your credit card by October 25th than, pay your credit card when you get paid on the November 1st.

Purchase Protection: Many credit cards now offer additional benefits to card holders when they use credit cards for certain purchases. A creditcards.com article explains that 83% of credit cards currently offer some type of purchase protection. These advantages range from extended warranty protection, purchase security benefits, price and return protection. Companies now see the need to provide consumers with an added reason to use credit cards over more conventional methods of purchase and these perks are a response to that issue.

Cash Back and/or Points: They say nothing in life is free, I tend to agree with this statement. Credit card companies offer many goodies to those users who accumulate points or may offer cash back. A strategy that I like to employ to earn cash back or points is to instead use credit cards when the money to purchase something is in my pocket. There are many people out there that view this as sacrilege but hear me out. If you can earn free points or money back for something you would be purchasing anyway why not? Instead of paying with your cash or debit card. Leave your cash in your account or swipe your credit card. Naturally pay the credit card the same day you would have used the cash or debit card instead. Voila now you have hacked your way to free points or cash back. Something is always better than nothing.

No way is my goal here to say you must use credit cards in your day to day life. But for those who still have apprehension at the thought of using a credit cards hopefully this post gave you some ideas that are in favor of using money of the plastic variety.