It may seem unreasonable to think that someone can use a credit card as the only payment method without falling into huge debt. The bad reputation credit cards have doesn’t help at all, and that’s why most people wouldn’t consider using a credit card as their primary paying method at all.
There are, however, some benefits from credit cards when you use them regularly. For instance, they help to build good and solid credit scores which is great for any upcoming big project you may have, this means that you may be eligible for low-interest loans.
Of course that it entails you use them responsibly no matter what else you can start to get into financial difficulty.
How can I use credit cards to my benefit
Don’t combine a debit card with a credit card: If the idea is to use credit cards to pay for your stuff on a regular basis, try not to include your debit card in the process. Debit card transactions reduce the balance in checking accounts so you may have a harder time to pay your credit card.
Only use one credit card: If you are going to use credit cards as your primary payment method, you need to use only one. This is recommended over using several cards to spread transactions, and if you do this, you’ll have only one debt to deal with, which provides more peace of mind than dealing with two or three bank statements with different balances and due dates every month.
Check that you have enough credit available: Always check if you have enough credit if you’re supporting your spendings on one credit card. If your card limit is not enough to cover your expenses, its best to wait.
Keep making your payments on time and using the card responsibly, after a while, the card company will increase your credit limit thus increasing your spending options.
What benefits do credit cards offer?
Some credit cards come with rewards, you can save a lot of money from credit cards cash rewards. They also come with miles or points that help you save money if you continue using your credit card constantly. Check with your card company to find a good credit card with rewards.
Credit cards also offer purchase protection in case the purchase gets stolen or lost. At this point, we should mention an infamous type of protection that banks used to offer not just for credit cards, but for lines of credit and mortgages.
They are known as Payment Protection Insurance – or PPIs – and they were insurance policies that banks started to offer to clients in case they had problems in paying the money back.
They started then to “sell” those policies to people who didn’t need one and in many cases, they included those payment protection policies without telling customers about it.
Those PPI cases were discovered and now the government is encouraging people to reclaim that money back from banks and so far, banks have returned over 33 billion to the rightful owners.
The whole scandal was outrageous but at least people are getting their money back. The government decided that August 29th 2019 is the final date to file any claim and there’s a big chance that everyone who acquired any type of credit with banks for the last ten, fifteen years, was charged a PPI policy they did not need.
You can quickly check here if you were also affected by this issue so you can start your claiming process right away. This may be a downside to credit card usage, but at least there’s a chance to get the money back. Don’t wait until the last moment to claim the tax-free money that belongs to you.
That being said, you can still make a positive experience by using credit cards as the primary payment method, but you must be disciplined and follow good financial habits, like paying on time, making budgets, sticking to them and keeping track of your spending.
If you are married or have a partner, make sure that you always discuss these financial matters together so neither your partner or you have unpleasant surprises.