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While credit cards get a lot of bad press when it comes to personal finance, they offer a number of benefits that, for the right people, make them a great financial tool.

The assumption, of course, is that you pay off your credit card balance every month. If you don’t pay off your credit card balance each month, the amount you pay in interest will quickly nullify many of these benefits. For those who have the discipline to pay off their balance each month, here are 10 great reasons to carry a credit card:

1. Improve your credit history and score

Getting a credit card will help you build and improve your credit history, as well as boost your credit score. Your credit score can affect a wide range of payments, and the better your score, the less you will have to pay. A high credit score can mean that you are paying an interest rate that is several points lower than what someone with a bad credit history would pay; this can mean thousands of dollars in savings over the life of the loan.

It is the same with an auto loan. A good credit rating can mean paying less for many insurance products, such as home and auto insurance. It can even be the difference between getting a job or not, as many employers are now pulling the credit scores of potential employees and eliminating those with bad credit history. Establishing a good credit rating by being responsible for using a credit card will mean significant savings in your lifetime compared to those with bad credit history or none at all.

2. Internet shopping

Having a credit card can save you money on the items you buy. Some of the best deals available are now on the Internet. In many cases, the only way to pay for these Internet purchases is by using a credit card. If you don’t have a credit card, you might have to pay more for the exact same thing you could have bought online, not to mention the added cost of driving to get the item.

3. Emergency money

A credit card gives you instant access to money in an emergency. Most of us carry the amount of money we think we need for a given day and not enough for an emergency. If you’re away from home and find yourself stranded late at night and need a hotel room, you don’t have to worry about whether you have enough cash on hand. A credit card can provide an instant solution to paying off many unforeseen expenses until you have time to transfer the money from your bank account.

4. Awards

There are many credit cards that offer a reward when you use them. This can range from cashback to travel points, vouchers for free plane tickets. By using a credit card that gives you a reward, you can actually earn money.

5. Purchase history

For those who aren’t good at keeping track of their receipts, a credit card gives you a full, itemized rundown of your spending each month without the effort of recording every purchase like you would if you were paying in. cash. This folder can be an easy way to help you create a budget and know where your money is going. It can also be a great reference at tax time for charitable deductions.

6. No fear of loss or theft

If you travel and lose your money or get robbed, you’ve lost all that money forever. If your credit card is lost or stolen and you report it immediately, you lose up to $ 50 (and most businesses will even waive these fees).

7. Interest-free money

Between the time you make a purchase with your credit card and the time you actually pay off your credit card, you have a period of time in which you earn money (if your money is in an account). bearing interest) on something you have already purchased.

8. Protection of traders

If you pay cash when making a purchase and the seller doesn’t pass, you’re almost out of luck. Your other choice is to continue to collect the money on your own, which will take both time and money. However, if you pay with a credit card, you have a good chance of getting your money back and the credit card company will do most of the work. You can simply call the credit card company and dispute the charge. The credit card company will then investigate and issue a chargeback if they find in your favor.

9. Purchase insurance

Many credit cards offer insurance on items you purchase for a certain period of time. You should read the fine print of your credit card’s terms of service (or call them up) to see exactly what type of protection your credit card offers. This means that if something is broken, lost, or stolen soon after you buy it, you can often get your money back. If you paid cash, it would be gone forever.

ten. Convenience when traveling

Traveling, whether in the United States or overseas, costs a lot of money. A credit card is a convenient way to pay for these trips so you don’t have to carry a large amount of cash with you. A credit card can also provide foreign currency easily when traveling abroad at rates that are generally better than those you can get from banks in the same country (although you should be careful with the exchange fees that the credit card does. credit may charge).

Credit cards can be wonderful financial tools that provide great benefits to those who use them to their advantage. If you have the discipline to pay off your balance each month, having a credit card makes great financial sense.

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