Credit cards are both a blessing and a curse for some people because while they allow items to be purchased and repaid over time, this can end up creating a slippery slope of debt. The key is to make sure that this does not happen. Judicious use of credit cards can actually be a positive situation.
Using a credit card or cash to pay for items helps individuals avoid becoming victims of fraud. Checks and debit cards, promoted to keep individuals out of debt, offer the least fraud protection. If a credit card number is stolen, the cardholder can report the fraudulent charges to the credit card company. The company acts as the intermediary, working with merchants to obtain proof regarding disputed charges. Cardholders only need to pay the charges that are undisputed.
A credit card offers an easy way to track spending through the use of statements and pairing with financial management software like Quicken. It allows an individual to track expenditures and view changes in spending habits. This is a great way to establish and maintain a budget. When individuals pay off their credit card balances each month, they are effectively managing a portion of their finances.
Many credit cards come with an awards program such as cash back or points. Consumers should compare these programs and select a credit card with a lucrative offering. The benefits provided are like free money, so they should not be overlooked.
Other credit card benefits include theft protection or extended warranties for items purchased. Some cards even offer death or dismemberment travel insurance for modes of transportation paid for with the credit card. Travel planning, roadside assistance, and personal concierge services are other travel-related benefits that many cards provide. Cardholders should read the information that comes with their cards to identify useful benefits such as these.
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