What are the benefits of having a credit card?
Spreading the payments of large purchases can be one of the biggest benefits of using a credit card. You can make a purchase today and then repay the balance over the course of several months.
A debit card works in a different way. It only allows you to spend the money in your account. A credit card gives you a lending facility that means you can spread payments of any size and manage your money more effectively.
If your credit card comes with an interest-free on purchases period and you make the purchase within that time then that money is like an interest-free loan, providing you manage your money effectively. Smart credit card users with good credit records can even practice ‘stoozing’, which is the art of switching balances between 0% balance deals to make sure they don’t pay interest on their outstanding balance.
With so many to choose from it’s actually possible to pay no interest on your credit card purchases and to simply transfer the balance as your introductory period comes to an end. You need to be organised and disciplined if you are going to attempt this though.
Credit cards can be convenient too; as you don’t need to visit a cashpoint and you can simply make payments on the card itself. If you keep your account in order and make your repayments on time, the credit card provider may allow you to increase your limit. This means you can make larger purchases, use your card while you’re on holiday or even pay for the full trip itself via credit.
Purchase protection is one of the biggest benefits of credit card ownership. The Consumer Credit Act means that the retailer and your credit card company both take a degree of responsibility for anything bought on the card. So you’re protected if you purchase any product that costs more than £100 and less than £30,000 should it not arrive, be damaged or be subject to another problem – great news for all of us.
Some cards also offer loyalty bonuses, air miles or even money off your weekly food shopping as a promotional tool – it’s worth having a look around.