Credit cards are small, plastic cards that enable you to purchase goods or services, then pay for them at a later date. Credit cards are typically issued by financial institutions such as banks, credit unions, and building societies, and by select retailers.
There are many benefits to using a credit card. First off it's convenient! As most establishments accepts credit cards, you can make purchases anywhere and anytime.
Credit cards also offer you a lot of added protection. Many credit cards come with added features which can reward your purchases whether you're shopping online or at your favourite retailer. Certain credit card issuers provide extended warranty and price protection insurance. Further, with your card's fraud protection feature, you can have added peace of mind knowing that you won't be held liable for any unauthorised transactions.
Making purchases with your credit card can also help you build up your credit history. Having a good credit history can be vital, especially if you're looking to take out a mortgage or a loan in the near future. A track record of consistently prompt payments will help you in establishing a good credit history. Not only would this make any future credit applications easier—you'd also enjoy better interest rates and spend less money in paying off your debts.
Let's not forget the other perks that come with having a credit card. You can earn reward points, which you can redeem later. You can also make the most of introductory rates, which let you save on your purchases for the first few months of your credit card contrac. Those who like to travel can make the most of frequent flyer miles, which can give you free trips; and rebates that let you earn back a portion of your credit card purchases.
If you're looking for a credit card, make sure you assess all its important features, including the following:
- Interest rate
The interest rate will determine how much you spend, in addition to your actual purchases.
Additional fees can prove to be quite expensive for credit card users. Fees can include late payment charges, cash advance fees, dishonour fees, over-limit fees, and annual fees.
Different cards are designed for different types of people. There are credit cards for students, shoppers, and travellers. The trick is choosing a card that fits your needs.
- Rewards programs
A rewards program lets you earn points and redeem them for perks. Choose a card that offers rewards that you can use, as long as it also provides best value for your money.