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Credit Card Advantages

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Are there advantages to having credit cards that I haven't considered?

Do you own a credit card? Do you use it? If not, you are losing out on some great benefits.

Maybe you've been in debt after paying off your credit cards you vowed not to get into debt like that again! You've no doubt figured out better ways to manage your money.

However, if you have an emergency and can't get to cash or checkbook, a credit card will come in handy. The key for using a credit card, as you've probably heard is, never charge more in a month than you can pay off at the end of the month.

Learn How to Use Credit to Improve Your Financial Life and Bottom Line

Advantages of Having a Credit Card

Consider this:

  • If you have a credit card that offers free airline miles for purchases, you'll earn free flights occasionally.

  • If you get a card that provides a check at the end of the year amounting to 1-2% of total annual charges, that's free money.

  • Some credit cards let you earn "points" for purchases to later, "spend" on items, like stereos, cookware, and house wares.


So, if you appropriately use your credit card and pay it off monthly, you can rack up extra money, free flights, or various housewares at no cost to you.

Credit Card Organizers

If you have more than one credit card, keep them organized in one of these Credit Card Organizers
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More Credit Card Advantages

Believe it or not, there are even more reasons to have and occasionally use a credit card:


  • Car rental liability insurance is offered by some major credit card companies. If your card has this coverage, you don't need to pay the incredibly high fees for the "loss and damage waiver" car rental companies try to charge you when you rent a car.

  • Insurance coverage for baggage lost when you fly is also available, depending on the credit card you choose. In fact, some credit card companies offering this insurance actually cover in addition to what the airline will pay you for lost bags. This baggage coverage is no cost on some credit cards and is well worth having.

  • Price protection for items you purchase that drop in price after you buy them is offered by some companies. That's right, even though stores tend to allow 30 days after purchase for you to take in your receipt to be refunded such price differences, some major credit card companies allow up to 60 days and will refund you such price differences.


So, it's a good idea to have one major credit card for these reasons. Take extra effort to read all the fine print on a credit card application to determine which of these options are included with any credit card you're considering.

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How to Use a Credit Card for Building Good Credit

How to Improve the 3-Digit Number that Shapes Your Financial Future The difference between good debt and bad debt is an important consideration when you're building good credit.

Having a credit card makes a positive impact on your credit as long as you make wise choices in the way you use that card.

Follow these strategies to use credit cards to build good credit:

  • Limit your cards. Too many credit cards will reflect poorly, rather than positively, on your credit reports. Open up only a couple of credit card accounts: a Visa or MasterCard account and a gas card or a card from a store you purchase from often will usually work nicely. Use these few cards regularly and then pay off what you charge quickly.

  • Use credit limits wisely. Just as you can call and request a higher credit limit, you can also call and ask for a lower limit or that they not raise your limit automatically. This will prevent you from letting your spending get out of control. Setting your limit to between $500 and $1000 usually works well.


  • If unnecessary spending doesn't tempt you, then it's even better to let them raise your credit limits as long as you don't use the extra credit. Using only 25% of your allowable credit makes the most positive impact on your credit score. However, if the limits help you keep your debt under control, then go with the lower limits.


  • Pay balances off completely. Whatever balance you accrue during the month, pay it off by the due date on your credit card. The best way to show the credit bureaus that you're serious about using credit properly is to pay your balances in full each month.


  • Most credit cards have a very small minimum monthly payment. The reason is because they can rack up serious interest charges on your card if you're only paying $15 on a $500+ credit card bill. Avoid paying the minimum balance at all costs.

  • Pay on time. Be very aware of the due dates for your credit card payments. By making your payment later than the due date, you could end up paying fees or a higher interest rate, losing credit availability, or having a negative mark put on your credit score. If you want to use credit to build credit, ensure you use it as carefully as possible.


  • Avoid the free offers. Sometimes credit card applications come with free offers like t-shirts, pizza and other gifts. Signing up isn't going to hurt you, right? Canceling the cards right after you receive them to take advantage of the free benefits can actually hurt you.


  • A cancelled credit card shows up on your credit report. Credit inquiries, approvals, and cancellations show up on all three credit reports, impacting your credit score. Avoid applying for anything that you don't plan on following through with.



Keep these things in mind when you apply for or use a credit card. If you don't think you can use a credit card wisely, then it's better for your credit if you don't apply for one.

It's all too easy to let credit card spending get out of control, so make good choices with your credit. Use your cards to build good credit and the time will come when you'll surely be glad you did.

How Good is Your Credit Score?

Check your credit score annually and keep an eye on anything that may lower your score.

Do You Use Credit Cards to Your Advantage?

  • CruiseReady Aug 18, 2011 @ 8:06 pm | delete
    Cards that reward with air miles are nice, but being an avid cruiser, I have one that pays rewards in sea miles. Free cruises are a great perk!
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