Credit cards have a pretty bad reputation, and it’s not that difficult to see why. After all, the average credit card holder in the US has around $5,668 of credit card debt alone. Not to mention that pretty steep interest rates mean that, once you get in hot water here, it can be tricky to ever get back out.
Then again, it’s also not fair to say that all credit card usage is bad. After all, when you take the time to understand your options with the help of companies like Compare Credit, it’s possible to enjoy all manner of credit card-based benefits, including cashback, one-off usage payments, and more. Not to mention that well-handled credit card usage can be one of the fastest and most efficient ways to build your credit profile. The question is, what exactly should you use your credit card for if you want to avoid joining that negative debt cycle?
# 1 – Big-ticket items
While it’s especially essential to ensure that you have or will have the funds for big-ticket items like your family car or a new washing machine, etc. before you buy, it’s actually pretty beneficial to buy big-ticket items like these using a credit card. Predominantly, this is because most credit cards will provide pretty decent cashback or points in these instances. The majority of decent banks will also provide insurance on credit card purchases, meaning that buying big items could see you enjoying extended warranties etc. which ultimately result in savings. Simply remember that, the larger the purchase, the more interest you risk in a short period if you aren’t in a position to clear this debt quickly.
# 2 – Online purchases
Anything you buy online is risky, especially if you’re handing your debit card details to merchants that you don’t know much about. Luckily, credit cards tend to offer fraud protections and traceable transactions for precisely this purpose, making them a fantastic option for safer online shopping. Some credit cards will even offer benefits like return protection, which allows you to claim any items even if a merchant won’t provide a refund. Obviously, safe shopping practices should still be a priority, but you can at least breathe a sigh of relief that fraud won’t land directly in your bank account this way.
# 3 – Travel
Credit cards that tend to be more widely accepted overseas are also beneficial for travel thanks to various benefits, including the accessibility of overseas purchases, and the potential for bonuses like frequent flier miles. Admittedly, most credit cards do now come with anti-fraud processes that mean you’ll need to confirm travel with your credit card provider before leaving, but with this done, you can certainly enjoy a less stressful trip in general.
Racking up huge amounts of credit card debt is obviously inadvisable, but using your credit card to pay for at least these prime expenses could well bring unexpected benefits, and some much-needed ease of payment, your way in no time.