The marvels of technology in the world we are living in are endless and exciting. And thanks to the interminable inventions, your day to day activities have been made easier and worth smiling about. These technologies have been, in most cases inspired by the introduction and evolution of the internet. And one of the aspects of your life that have not been spared by technology is the financial aspect.
Take a credit card as an example; it is indeed a fantastic invention. This is a card issued by a bank or any other financial institution, and it allows you as the cardholder to be able to get products and services on credit. But how exactly does a credit card work? They work using a similar concept as taking a loan from a bank or a financial institution.
After making a purchase, you will be required to pay the money to the credit card provider within a period agreed upon. Failure to do so will attract an interest amount that will be communicated to you. It is important to note that the amount of interest is usually communicated to you on the terms and conditions list.
In this article, we will highlight some of the benefits of getting and using credit cards for excellent credit to help you get started.
- The perfect solution to emergencies or unexpected emergencies
It would be outright frustrating having an emergency or encounter an unexpected emergency, but unfortunately, you don’t have enough money on you. You could also be having a medical emergency such as running out of your life-saving drugs, and you could have the need. Whichever the situation you could be facing a credit card will bail you out when you need money the most.
It is, however, important to ensure that you settle your dues at the right time or when required to. Which takes you to this next point.
- Can in a significant way build your credit history
Whether or not your credit card has a limit, it is always vital to make sure that you pay your dues right on time or before the due date expires. What does this do? To understand this point better, you need to put yourself in the credit card provider’s shoes. Chances are you are likely to trust an individual who pays back the money they owe right on time. And in case they want more credit, or an increased loan limit chances are, you will likely trust them.
That is how building your credit limit works. The trick is simple, pay on time and get more or increased credit.
- The aspect of being able to track all the uses
Every time your credit card is used, the information is usually collected and recorded in the credit card provider’s database. This information can be availed to you upon request or after a specified period say every month. This should not make you feel like you rights have been infringed in any way.
In fact, after receiving a statement and you happen to notice something sinister and report to the card provider, they will be able to look at it and identify the problem. This is how cases of fraud are identified and worked on.
- Credit cards are convenient
Carrying hard cash around can, to some extent, be uncomfortable, especially when you are on your way to make an expensive purchase. Hard cash the same might also expose you to cases of insecurity, which might cause you bodily harm. The advantage of a credit card is that it will save you from carrying hard cash no matter how expensive your purchase is going to be.
- The power in the phrase purchasing power
Purchasing power can, in simple terms, be defined as the ability to purchase what you want and exactly when you want. This is not always possible if you are not a credit cardholder. In most cases, it is impossible to carry a bag filled with money, unless if you are a big-spending rich celebrity. Credit cards may seem simple, but they wield excellent purchasing power.
- Customer or loyalty bonuses
Credit card providers usually have reward systems for loyal clients. Such reward programs include discounts on interest, and you might get some points which can be redeemed through making a purchase.
Disclaimer: This content does not necessarily represent the views of IWB.