It has become the norm for some people in to view the credit card industry as vicious and malevolent; but in actuality, the ability to purchase goods and services on credit is a luxury that many take for granted. In fact, economics and finance would certainly suffer as a whole if consumers could not make purchases with the use of credit cards.
One major advantage of having a credit card is that it allows one the use of funds that would otherwise be unavailable in the event of an emergency. For instance, should one be faced with unexpected expenses stemming from unforeseen circumstances, an illness for example, they would have the ability to pay off these expenses with their credit card and pay them over time. However, we always recommend that you never charge more than you can handle.
Another benefit of purchasing on a credit card is the ability to buy goods online. When combined with online coupons or coupon codes it ends up being cheaper than going to a retail store. Some cards also give you a extra year of warranty on the products you buy for free! Plus, using a credit card to make a purchase in this case ensures the integrity of the exchange. If the merchant does not send the correct product, or does not send anything at all, credit card companies will step in to help get a refund and reimburse the customer.
Most importantly, they help build your credit score. Having a good credit score ensures you the best possbile loan rate, when it comes time to purchase something like a home or car. Most people do not have the funds on hand to pay for investments of this nature, and without the ability to use lines of credit, these purchases would be nigh impossible. Furthermore, in some cases employers take into account the credit rating of potential employees when evaluating the stability and personality of applicants to certain jobs.
Credit cards also bring convenience to the table. It can prove quite bothersome to have to go to the bank every time one needs money to make a purchase. With the ability to buy on credit, this is no longer a problem. It is also safer to carry a credit card compared to carrying cash. In the event that a person loses their wallet, they are usually not held responsible for fraudulent charges placed on their credit cards. In this sense, it is easily to be preferred over carrying large quantities of currency (not to mention a credit card doesn’t take up nearly as much space in a wallet).
Credit card statements also give consumers a great way to quantitatively analyze their spending, and can allow one to make changes as needed to more easily live within their means. From this perspective, credit cards provide a great way to teach individuals the benefits of financial responsibility, which can prove invaluable later in life.
While it can be said that irresponsible use of credit cards is a very legitimate threat to those without any self-control, for the typical consumer, they are a godsend. What other advantages do credit cards bring to the average person?
Author biography: This article was written by Luther Gerken, a recent college graduate who studied economics. He has done freelance writing for several years, and specializes in finance.
