Owning a Credit Card - should we avoid them entirely?

Definition of 'Credit Card'

A standard-size plastic card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. It is a plastic token that are a convinient subsitute for cash/cheque transactions as part of the essential electronic components.

Many tend to believe Credit card is a means to an end in their financing due because often users spend recklessly out of the experience of convenience and satisfaction the card allows and ended up with a debt at the end of the month. However this is like avoiding power tools because they are more dangerous.

A Powerful Financial Tool

Credit cards will not help you achieve financial freedom, nor will they send you to financial hell. A credit card is simply a financial tool that must be used with care. There are pluses and minuses to consider, and when used responsibly credit cards can make your life easier.

Benefits of Using Credit Cards

• You can make transactions without on available platforms that can't be done with cash/cheque — e.g., online purchases
• The convenience and ease & fast transactions as well as automations — e.g., automatic bill payments, etc.
• You get to enjoy cash back bonuses and reward points that certain credit cards offer.
• It’s easier for you to keep track of your purchases.
• It’s safer than carrying around physical cash.
• You are better protected against fraudulent purchases and you can often get your money back.
• You won't loose your money for loosing your credit card (provided you cancel the card from the bank before falling to other people's hand)

Additionally, there are other benefits depending on the specific card that you use such as Low to No interest rates/discount on physical purchases/ rewards points & complimentary benefits

A Few Reasons Why You Should NOT Use Credit Cards

• You are easily swayed for impulse buying and spend more.
• Racking up a big amount of debt at the end of the month without noticing it.
• If you do not pay your balances in full, you could end up paying a lot of finance charges.
• You could be hit with expensive fees — e.g., late fees, annual fees, etc.
• Irresponsible use of credit cards could wreck your credit scores.

So owning a credit card is a very subjective manner, it has its fair share of benefits as well as its weaknesses. However one should not disclose credit card as a plastic that would plunge you into financial hell. Like any tools, its up to the owner how it is being used and not to fear the tools itself.

Those who are considering to apply for credit card for the first time, don't miss out and read the "5 tips for Choosing Your First Credit Card" to get the most out of your credit card experiences.

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Choosing Your First Credit Card

One of life’s rites of passage — whether right or wrong — is getting that first credit card. When used properly, a credit card can help you create a good credit history that will serve you well when it comes time to buy a car or a home. When used irresponsibly, though, credit cards can result in debt and despair. One of the things you can do to encourage good credit habits is to choose your first credit card wisely.

Who Can Get a Credit Card?

First of all, it is important to note that credit cards aren’t as easy to come by as they used to be. In certain states, you have to be 21 in order to get a credit card, unless you meet the following criteria:

• Parents or guardian to co-sign the card with you
• A spouse who is eligible to co-sign with you
• You have proof that you can cover your credit obligations - (this normally means job)

Develop a Banking Relationship

One good way to get your first credit card is to establish a banking relationship. Open an account at a bank , and start using it. A savings account is a good idea, but you want to make sure you have a checking account as well. Use the debit card with your checking account wisely, and you will show your level of responsibility.

After six months or so, if you have proven yourself, you can go in an ask about getting a credit card. A credit card issued by your local bank or credit union. Once you show that you can manage your credit responsibly, paying off the card each month, you can get an increase in your credit limit, and you will see other credit card offers, with more attractive terms.

What to Look for in Your First Credit Card

If you decide to branch out beyond your bank for your first credit card, you want to make sure you are getting the best possible deal. This means shopping around a little bit, and not making your decision based solely on what swag is being offered by representatives trying to sign you up. Here are some things to look for in your first credit card:

1. Reasonable interest rate: As someone without a credit history, you will have to pay a little bit higher interest rate. That is to be expected. If you are a student you might compare student credit cards, since they offer rates that are comparable for credit history. If you have some history, such as a car loan, or a student loan, than you have been making payments on, you might be able to qualify for a slightly lower rate.
2. No annual fees: Make sure your first credit card does not come with annual fees, or with application fees.
3. Consider rewards: Many credit cards come with rewards programs. Before you choose a card, make sure the program is something you will use. Don’t choose a travel rewards card if you are unlikely to use your airline miles. If possible, choose a flexible rewards program that allows you to use your points on a variety of options. Some student cards also offer rewards points for engaging in responsible behaviors, such as making your payments on time.
4. Penalties: Some credit card issuers are starting to mull the idea of charging inactivity fees and similar penalties. Look for a credit card that will not charge you just because you haven’t been using the card. Also, compare fees like late payment, over the limit and cash advance fees.
5. Introductory rates: Many cards offer introductory rates. Make sure that you understand when that plum rate ends, and be prepared to have purchases paid off by then. Another possibility is to start out with a secured credit card. However, you want to make sure that fees are limited, and that the issuer actually reports your payments to a credit bureau.

Dont wait any further and apply your brand new credit card now!

Want to save even more money? Why not go ahead and MAKE more money with as little as effort as Saving them! Click Here or the title below to learn from a Superhero of Making Money

CLICK ON THE IMAGES BELOW AND FIND OUT MORE ABOUT THE SHOE-IN MONEY.

SO COME IN AND FOUND OUT HOW I DO IT!