subject: Top 5 Uses Of Credit Cards [print this page] A lot of the financial experts have not backed up credit cards in a great fashion. This is mainly due to the unwanted usage.
The overuse of credit cards is the main reason behind the increasing debt rate in several countries. Considering this, the elimination of credit cards from life is not the perfect solution. The trick is to use the cards responsibly and the use of credit cards for certain purposes is really beneficial to the user. Like any other thing, credit cards also have their merits and demerits and it is good to be aware of both. This article will surely help you a great deal in achieving that.
Emergencies
Credit cards are always helpful in emergency situations. For example if you are stuck in an unfamiliar country and somebody pilfers your cash, then credit cards are the one thing that you can heavily rely on. It is always better to keep in mind that you never want to use the credit card to buy something that is worth more than your monthly income. A clear mind is the first thing to have in such situations and act accordingly. If your car breaks down, then it is a perfect situation to make use of the credit cards. You can also use the credit cards to pay for repairing damaged households.
Credit score
Using the credit cards on a regular basis gradually increases your credit score. The credit score consist of your debt-to-credit ratio, how long have you been the holder of the account, the on-time payments and history of felonious payments. Bad habits such as paying late or running a huge balance will decrease the credit score and the providers usually dont promote those. In such scenarios, they will ask you to surrender the credit card. So to avoid all this, one must use the card for specific purposes like buying gas or groceries etc.
Monitor usage
It is always better to avoid the frequent use of credit cards or else it can lead to an unimaginable debt. The users must not forget to use the credit cards on a consistent basis, because most of the providers have a tendency to cease the accounts that are not used consistently. Try to purchase items that are priced around 50 dollars to 70 dollars using the credit card once in a month. A closed account will not help you improve your credit score and usually has a negative impact on it. The regular use of the credit cards will help you create and maintain a good credit profile.
Considerations
Students are the ones that misuse the credit cards. For them it will be best to use low interest student loans. This loan has to be repaid only after the studies and the interest rates are much lower than the credit cards. If you are unemployed then avoid the use of credit cards in all circumstances.
There are many pros and cons of the credit cards and one must be aware of them to make the best use of the cards. If you wish to possess a credit card, then consider the above discussed points.
