Taking out a credit card can seem like a daunting prospect, especially if you’ve never applied for one before. However, it’s important to keep in mind that obtaining a credit card can help you in more ways than you might expect, especially as you are building your financial reputation and wealth!
If you’re currently thinking about applying for your first credit card. Try to apply for a credit card and enjoy these ten surprising benefits of credit cards, and you’ll never look at them the same way again!
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1) Build your credit
One of the most important benefits of having a credit card is that it can help you build your credit. If you use your credit card responsibly and make your payments on time, you can improve your credit score. This can help you qualify for better interest rates on loans and other lines of credit in the future.
2) Get cash back rewards
Who doesn’t love getting cash back? With a credit card, you can get a percentage of your purchase price back in the form of rewards. Rewards can be used to offset future purchases, effectively giving you a discount on everything you buy. Many cards offer additional perks, like extended warranties and free rental car insurance.
If you’re a frequent traveler, having a credit card can help you rack up points or miles that can be redeemed for free or discounted travel. A good credit score can save you money in the form of lower interest rates on loans and lower insurance premiums.
3) Earn miles with frequent flyer programs
If you’re a frequent flyer, you can earn miles with your credit card that can be used for free or discounted travel. Plus, many cards offer sign-up bonuses that can give you enough miles for a free flight. And if you have good credit, you can get a card with no annual fee and a low-interest rate.
4) Receive rental car insurance benefits
You can get rental car insurance through your credit card, which can save you money and hassle. Credit card rental car insurance is often secondary, meaning it covers what your car insurance doesn’t. You can use your credit card to book and pay for rentals, which can help you earn rewards points.
Many cards offer trip interruption and delay coverage, which can reimburse you for expenses if your plans are disrupted. Some cards come with built-in concierge services, which can help you plan and book travel arrangements.
Certain cards offer purchase protection, which can safeguard your purchases against damage or theft. Some cards also offer extended warranty protection, which can extend the warranty on eligible items.
5) Save on purchases with a store card
If you frequently shop at a particular store, you can save money by applying for a store credit card. Most store cards offer exclusive discounts and savings opportunities to cardholders. For example, you might be able to get 10% off your first purchase or receive discounts on certain items throughout the year.
Store cards can also help you save on interest charges. Many store cards offer 0% APR promotional financing, which can help you save money on big-ticket items. Plus, you’ll earn rewards points every time you use your card, which can be redeemed for future purchases.
6) Maximize employee discounts and employer benefits
Do you know that credit card companies offer valuable employee discounts? For example, American Express offers an annual $100 air travel credit to cardholders who are also employees of select companies.
If your employer is one of them, you could be getting a big discount on your next flight! Other benefits can include things like free checked bags, priority boarding, and early access to booking. All of these can add up to significant savings on your travel expenses.
7) Get balance protection when you travel
You’re covered if your luggage is lost or stolen. If you’re stranded due to a canceled flight, you can use your credit card to book a hotel room or rent a car. Many cards offer extended warranty protection on items you purchase, which can save you money down the road. Some cards offer price protection, which means you’ll be reimbursed if the price of an item you purchased drops within a certain time frame.
If you’re ever in need of emergency cash, most credit cards will allow you to withdraw cash from an ATM (although this comes with fees). A lot of cards now offer perks like free checked bags, priority boarding, and even free travel insurance.
8) Use points as vacation money
Imagine having points that you can use as vacation money, rather than relying on your savings account or credit cards. Applying for a credit card can be the first step to taking your dream vacation.
Most people think of credit cards as being used only in emergencies, but if you manage your finances responsibly, you can use your credit card to earn points for free travel. Many credit cards offer rewards programs that allow you to earn points for every dollar you spend. These points can be redeemed for airfare, hotels, rental cars, and more.
9) Pay less interest on revolving debt
One of the main benefits of having a credit card is that you can often avoid paying interest on your revolving debt. This is because most credit cards offer a grace period of 21 days before interest is applied to your balance. This means that if you pay off your balance in full each month, you will never have to pay any interest on your debt.
This can save you a lot of money in the long run, as interest charges can add up quickly. Another benefit of having a credit card is that it can help you build your credit score. This is because when you use a credit card and make timely payments, it shows potential lenders that you are responsible for the debt.
10) Ensure you are safe from fraud
When you are ready to apply for your first credit card, there are a few things you should keep in mind to ensure you are safe from fraud. First, always make sure you are using a secure website. Second, never give out your personal information to anyone who contacts you unsolicited.
Third, be sure to read the terms and conditions of any credit card offer before submitting your application. Fourth, monitor your credit report regularly. Fifth, beware of phishing scams. Sixth, know your rights under the Fair Credit Billing Act. Finally, report any suspicious activity to your credit card issuer immediately.
If you’re on the fence about whether or not to apply for a credit card, consider these ten benefits. From improving your credit score to building up rewards points, there are plenty of good reasons to get a credit card. Just be sure to use it responsibly!