6 Reasons to Own a Credit Card (One Might Surprise You!)

It certainly pays to own a credit card. After all, there are many benefits that come your way once you have a credit card.

Accordingly, the focus of this post is on credit card ownership. Reading through this post, you will have a good idea of the solid reasons it makes sense to own a credit card.

ADVERTISEMENT

While some reasons are quite obvious, others might surprise you! Read on to learn more about why.

1. Credit Period

One of the fundamental benefits of owning and using a credit card is the credit grace period that you get. While there is no definite period that applies to all credit cards, in most cases it is at least one month and can go up to 50 days or more.

How it works is if you incur a charge on your card today, you will have anywhere from a month to 45 to 50 days (or even more) to pay back the balance. If you do so, then there is no charge levied, be it interest or any other form.

ADVERTISEMENT

The key is always to pay on time and in full once the due date arrives. Otherwise, the fees and charges invariably add up really fast.

2. Cash Advance

Besides the ability to purchase goods or services simply by swiping your credit card online or offline, when you own a credit card, you have the unique ability to withdraw cash from ATMs or bank branches.

Typically, this cash component forms a part of the overall credit limit available to you on your card.

ADVERTISEMENT

So, for instance, if you have a $3,000 credit limit on your card of which 40% is offered to you as cash advance, you can withdraw up to $1,200 as cash.

Bear in mind that your overall usage will impact the actual cash amount available to you. So, if you have almost maxed out your credit limit, you will not be able to take out a cash advance from your card either.

Also, cash advances typically come with a few unavoidable costs. For instance, there is a cash advance fee that is levied as soon as you avail such an advance. Further, interest on cash advances is levied by the day, so, even if you repay the advance only five days later, interest for those five days will be levied.

3. Reward Points

Pretty much every credit card offers reward points for its usage. The number of points or rewards for every expense varies from card to card, but the concept of reward points remains sacrosanct across all cards.

Simply use your credit card for regular purchases the way you always have, and be rewarded for doing so! What could be better than that?! Rewards points can be redeemed for things like air miles, gasoline discounts, merchandise, and more.

Reward points usually have an expiry date, so, ensure that you use them within the stipulated timeframe.

If you struggle to find something to redeem the rewards for in the allotted time, some cards also allow points to be redeemed for cash, which can be offset against the outstanding balance on your card.

Reasons to Own a Credit Card
It clearly pays off well to own a credit card, as highlighted in this post. Image Source – http://www.joinmoolah.com/blog/credit-card-benefits-disadvantages/.

4. Cash Back

An exciting facet of credit cards that have taken off in a big way in recent times is cash back, received on regular usage of your credit card. To get cash back, all you have to do is use your credit card the way you usually do. By simply doing so, you will be rewarded with cashback on your account.

This is not a universal feature and not all credit cards come with cashback benefits. Also, the cashback rate varies. Some may offer 1% cash back on purchases while others may offer up to 5% depending on the type of purchase.

Additionally, there are some terms and conditions that apply for availing of this cashback. For instance, while some may allow the requisite amount to be offset against the payable amount on your credit card account, others might have that money deposited into your bank account.

Policies vary among credit card companies, so be sure to check the card’s documentation or directly with the credit card company to get a complete perspective on it.

5. Financial Security

One aspect of owning a credit card that might be a surprise is that we automatically become privy to a lot of financial security.

After all, credit card ownership is akin to carrying a reasonable amount of money simply on a piece of plastic. No matter where you go and what you do, you can simply swipe your card for the items you purchase or the services that you avail.

The financial security that this brings, and indeed the peace of mind that comes with it, can be absolutely priceless.

This is especially true when considering the additional financial perks offered by banks and credit card companies. For instance, personal insurance is often an additional value-add that is bundled into the credit card package offered to you.

6. Credit Building

For the vast majority of us, credit cards are the first step toward responsible credit handling. After all, bigger credit situations such as property mortgages do not happen in many of our lives, while credit cards invariably do.

This is just the right time for us to go about building credit responsibly with the aim of having a rock-solid credit score.

Conclusion

When you own a credit card, you gain a number of benefits, some of which may surprise you. Consider these when shopping for the right credit card for you.

Disclaimer: All credit products carry risk. Be aware of these risks by reading the associated terms and conditions.