Part 1. Financing Essentials: Credit Cards

Using credit cards for daily payments has become convenient and advantageous. Use your credit card limit wisely each month and gain the benefits of a good credit score and higher future limits.

Credit cards are commonly used for bill payment, day-to-day purchases, and online use. 77% of Americans use or have at least one credit card, as per the bankrate.com data. Most of us have more than one credit card and use credit cards as our preferred payment method. Banks offer various credit cards with benefits depending on our needs. Credit card benefits include travel, shopping, gasoline, dining, and more.

Selecting the Best Credit Card

As options for a credit card vary, one can select the card based on their needs and lifestyle. For a frequent traveler, a discount on flight bookings and hotels suits their needs. If you shop on Amazon so often, having an Amazon special credit card gives you plenty of discounts on your favorite purchases. Endless options make it easy to keep 2-4 credit cards and use them frequently.

Banks offer easy and extended repayment options without worrying about missing a due date. Rewards and discounts vary from bank to bank, and minimum spending requirements for encashing rewards may exist. However, check your weekly or monthly spending and spend on essentials without going overboard.

Benefits of Credit Card

A credit card makes it easy to use, and no need to carry a hefty amount of cash to your desired shopping place. You can use Apple Pay without tapping your card at most locations. The credit card allows you to spend in need even if you don't have cash or cushion available. Pay in time to build your credit score and enjoy higher future spending limits. If you have already built a solid credit score, it becomes easy to make and avail of loans for future purchases of elevated amounts. Credit card spending is described as secure compared to debit cards, and federal law rules stipulate liability of up to $50 for fraudulent user payments.

Key Facts

Keeping one or two credit cards helps you to use money in need. Most credit card holders in the United States have 3-4 credit cards. The ideal credit score to get a credit card is 720-735, but it depends on the service providers. You can apply to credit card providers online or call customer service to obtain a credit card. A few credit card companies are Citi, Chase, Discover, American Express, Master Card, and Capital One. Before applying, prepare your SSN, legal name, address, and income details.

Word of Caution

Keep a tab on your monthly spending and limit spending on a credit card. Check your credit card statement monthly and evaluate your income and expenses. Rewards sound tempting, but spending requires budgeting. Prepare a budget for future expenditures and stick to the budget. Most travels make you overspend, as places to explore are always exciting and worth experiencing. However, avoid going out of the budget and paying higher interest later on your credit card while repaying your dues.

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