Advertising
Advertising

10 Reasons Why You Should Be Using Your Credit Card For Everything

10 Reasons Why You Should Be Using Your Credit Card For Everything

Credit cards aren’t just used to pay off major purchases anymore. You might feel silly using a credit card for a small purchase, but there are benefits to this transaction! Why else are companies putting credit card slots on drink machines? You should be using your credit card for everything—and here are ten reasons why.

1. It builds a great credit rating.

Buying things with your credit card and then paying them off each month will help you build credit. It will either help you establish a good credit score from the start, or rebuild a good credit score if you’ve had problems in the past. Make sure you’re still spending within your limit, and can afford to pay the bill off in full each month so the interest doesn’t add up and make your bill exponentially larger.

2. It’s quick and easy.

No more hunting for exact change! Credit cards make checkout easy. Just swipe your card, sign your name, and you’re done! Now with smartphone apps, you can pay with a pass on your phone. There are also cards that allow you to just “tap” the checkout machine, and the money is automatically paid!

Advertising

3. It’s great for accounting records.

It’s hard to keep up with receipts, but if you’re sticking to a budget, doing your own taxes, or just making sure you don’t get overcharged for anything, then you need to keep track of those slips of paper. If you use your credit card, however, you have a built-in list of everything you’ve purchased. You can sign on to your bank account online and see what you’ve spent over the past month to make sure you’re still on budget. You can double-check your bank balance and make sure there was no unauthorized spending. You can do all of that—and you don’t have to keep track of anything!

4. There’s no need for cash.

Forget trying to find an ATM, or paying ridiculous fees to access your own money! With a credit card, there’s no need to carry cash. Most companies have put credit card slots on drink and other vending machines, so you won’t even have to scrounge for change! This is also a security issue, because if you get robbed, you won’t be losing cash that will be unaccountable when you make a police report.

Advertising

cokecredit

    5. It has automated billing.

    When you get your credit card, sign up for automated billing! This means your utility bill, cell phone bill, and anything else you pay monthly can be paid automatically by your credit card. It’s a load off your mind, because you don’t have to remember countless due dates, or try to think back if you paid a certain bill or not. Then you’ll just have one date to remember—the due date for your credit card!

    6. You’re establishing good payment habits.

    Paying off your credit card balance every month will help you establish good payment habits. You’ll be paying bills on time with automated billing, and paying your balance each month, whether it’s paying it in full or paying enough to keep the interest down.

    7. You earn frequent flyer miles.

    Using your credit card will earn you all sorts of perks. Make sure you look into your specific card and see what benefits you can get. If you travel a lot, each credit card purchase will earn you frequent flyer miles, or free stays in hotels. You can also get cash back or discounts on major payments.

    Advertising

    8. You can get purchase protection.

    Buying with a credit card means there’s a potential for purchase protection. Your credit card company will handle disputes for you, so if a store won’t take back a defective product, there’s a good chance your credit card company will either fight for you, or reimburse you. There’s also a built-in protection against card theft—most credit card companies will call you when they see suspicious activity. Some even block the card so the purchase won’t go through without your authorization, or reimburse you for purchases that went through with a stolen card.

    9. You get low-cost loans.

    You don’t have enough cash for groceries and bills this week, but you need them both. Use your credit card! Credit cards are like low-cost loans, because you can buy something now that you don’t have cash for, and pay it back at the end of the month when your credit card bill is due. Just make sure you know your budget and don’t go overboard by buying things you’re unable to pay back.

    10. You have a buffer for emergencies.

    Just like using your credit card as a loan system, it’s great as a buffer for emergencies. Things will happen that demand your financial attention, like your heater going out in winter, or your fridge breaking down. Can you afford to buy either of those major appliances in cash? What about hospital bills you didn’t expect? Most people don’t have that kind of cash on hand, but again, with a credit card, you can take out a type of loan. Buy what you need and start to pay it off over time on your credit card.

    Advertising

    Featured photo credit: mueritz via flickr.com

    More by this author

    10 Incredible Benefits of Cuddling That Make You Want to Cuddle Now 16 Productivity Secrets of Highly Successful People Revealed Why You Should Keep A Journal And How To Get Started 15 Differences Between the Boy you Date and the Man you Marry 10 Signs That You’re Ready For Marriage

    Trending in Money

    1 How To Pay Off Credit Card Debt Fast: 7 Powerful Tips 2 How To Make a Million Dollars in 7 Steps 3 7 Cheap but Powerful Products That Can Help Your Waste Less Food and Save Money 4 How To Retire Early (And What To Consider Before You Do) 5 How To Create a Budget (The Complete Beginners’ Guide)

    Read Next

    Advertising
    Advertising
    Advertising

    Published on January 8, 2021

    How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

    How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

    Ever wondered whether your credit card debt is the reason you’re in a bad financial situation? You can’t enjoy any fun activities because a good chunk of your money goes toward debt payment. Heck, you’re even behind on some of your monthly bills.

    The effects of clumsy debt management are too many to list here. This guide is going to help you discover how to pay off credit card debt fast and start chasing your financial goals.

    Debt problems are the last thing anyone wants to encounter. But things can get out of hand when all the “little debts” you take accumulate in interests.

    What if you knew some simple and proven ways to be debt-free quickly? Implementing them would mean better financial health for you. It becomes possible to free up cash for your “wants.” These include taking a trip or buying something you’ve always desired. All that while paying your bills on time!

    Let’s not wait any longer. Here are 7 powerful tips for paying off credit card debt fast:

    1. Pay More Than the Minimum Credit Card Payments

    Many people only pay the monthly minimum on their credit cards. Truly, that’s the right amount for staying on good terms with your credit card company. But you need a different approach if you’re looking to achieve financial independence within a short time.[1]

    Most of your payments go toward interest costs when you only pay the minimum amount. A substantial sum of your balance remains standing. As a result, it becomes more expensive to eliminate your debts.

    Advertising

    You don’t want to wait more than 10 years to get rid of debt while it’s possible to do it sooner. All you have to do is double that $100 minimum payment to $200 or go higher.

    The good thing is that minimum credit card payments are affordable in most cases. By paying a higher amount, you reduce your interest costs, lessen your borrowing period, and boost your credit score.

    2. Start With High-Interest Credit Card Debt

    If you have more than one credit card debt, prioritize putting the extra money toward the ones with the highest interests. This debt pay-off strategy, known as the debt avalanche method, is essential for being debt-free quickly.[2]

    First, you need to list down all the credit card debts you have in the order of their interest rates. Next, you choose the one with the highest interest and pay a significant amount toward it each month. It can be an amount twice or even thrice larger than the minimum payment.

    At the same time, you make monthly minimum payments on the other debts. Their interest charges won’t be as costly as that of the first debt on your list. You only move on to the next high-interest debt after the first one is gone. Remember that your focus is on the interest rates and not the balances.

    3. Revisit Your Budget

    Budgeting is useful for tracking your financial moves. Once you create a budget, some tweaks along the way can make it work for you better. One situation that requires you to revisit your budget is when you’re struggling with debts. It might hurt a bit to slash some expenses. But you also don’t want to miss out on achieving financial freedom in the long run.

    You can reduce some variable expenses to free up more cash for credit card debt payments. They’re the ones that change from time to time. Some examples are groceries, fuel, and clothing.

    Advertising

    Other opportunities for cutting down your spending lie in non-essential expenses. Instead of dining out all the time, you can cook at home more to save money. You can also share some subscriptions with friends and pay a fraction of the cost.

    If you’re determined enough, you can eliminate all your unnecessary expenses and focus on paying off your credit card debt first.

    4. Avoid Using Your Credit Cards

    Do you want to know how to pay off credit card debt with a low income? One simple way is to stop using them. Having your credit cards everywhere you go means that you’ll be more tempted to buy unnecessary stuff. In this case, you spend money that you don’t really own and get deeper into debt.

    The quickest fix to stop the debt build-up is spending with cash. You’ll be more aware of everything you can afford at any particular time. If you decide to keep one or two cards to ease the transition, always make wise choices. For instance, only use them when experiencing financial difficulties.

    It’s best to categorize your fun activities under “discretionary spending” in your budget. This way, you won’t need more debt to kill your boredom. By halting your credit debt from accumulating, it’s easy to pay down what you already owe and be happy with the progress.

    5. Start a Side Hustle to Boost Your Income

    You’re probably turning away a lot of money by not monetizing your skills. Everyone has something that they’re good at doing. And you can use that to generate extra income for attacking your credit card debt.

    If you look around your neighborhood, you can find several side hustle opportunities. It can be pet sitting, tutoring, or lawn mowing. You can start an online business by offering services such as digital marketing, content creation, and web development. Such skills go in high demand on freelance sites and job boards.

    Advertising

    Finding clients on social media is also a good strategy to utilize your skills and make more money. Facebook groups, Quora Spaces, and subreddits are some places to look for side jobs. You only have to join a niche-specific platform, share your services, and respond to any opportunities.

    It’s possible to learn a skill, practice it, and earn from it. Use the free resources online or purchase some e-courses to get started.

    6. Sell Your Used Items for Extra Cash

    Starting a side hustle isn’t the only way to generate extra money. You can turn unwanted items into cash for paying off credit card debt. Whether it’s an old TV, book, or furniture, there is always someone itching to buy your used stuff.

    A garage sale, as much as it’s old-fashioned, is perfect for getting your neighbors and passers-by to buy from you. You keep all the money because there are no business permits or taxes involved. While you may not make much cash, it’s better than leaving your stuff to go defunct in your storage.

    Other than that, you can sell your used stuff on online marketplaces. Facebook groups are great places to start if you want quick approvals and hence sales. You only have to ensure that your listing follows Facebook’s commerce policies.

    When selling any pre-owned items online, ensure they’re in good shape to avoid problems with your buyers.

    7. Know When to Seek Help With Your Debt

    Asking for help with your credit card debt can be challenging to do. But letting it drown you is a road you don’t want to take. While you may feel embarrassed at first, it’s the best way to get back on track when you run out of options.

    Advertising

    There are tons of non-profit credit counseling organizations that can offer you free guidance on how to escape the debt trap. An example is The National Foundation for Credit Counseling. They simply review your finances and help you determine the source of your financial problems. After that, they match you with an actionable debt management solution.[3]

    In extreme cases, the debt solution can be:

    • Debt relief – where your debt is partially or wholly forgiven
    • Debt consolidation – taking out one loan to repay others
    • Debt settlement – the creditor forgives a significant portion of your debt
    • Bankruptcy – legal process for seeking relief from some or all your debts

    It’s necessary to carefully weigh your options before deciding on the way to go. Find out how it might affect your credit score and any other risks.

    Wrapping It Up

    Debt is a major setback when you’re trying to prosper in life. Paying off credit card debt is essential if you want to reach your financial goals. That means having more free income, a good credit card score, and even a chance to retire early. You become more productive each day because of the peace in your mind.

    So, you now have some tips on how to pay off credit fast. Go ahead and get rid of that good life progress killer!

    More Tips on How to Pay Off Debt

    Featured photo credit: rupixen.com via unsplash.com

    Reference

    Read Next