If not used wisely, your credit card can get you into a lot of
financial trouble. If you pay your monthly instalments in full, every
month, and you don’t spend money you can’t afford to spend, there are
many pros to owning and using a credit card.

1. Perfect way to build financial history

Especially in the current economic climate, it is getting more and more
complicated to get finance, whether it is for your dream home, an
exotic holiday or a car. Getting a loan becomes even more challenging if
you don’t have a credit history. Banks and other financial institutions
use your credit card to investigate your credit history, so that they
can determine your risk profile. If you don’t have a credit card, this
becomes very difficult, if not impossible, especially if you have no
other cards such as store cards. Using a credit card in the right way is
the best way to prove that you are financially responsible. Getting a
new credit card is a great way to prove that you are very capable of
taking care of your bank accounts, which improves your credit rating.
Having more than one credit card is an even better way to accomplish a
good credit rating. When using a credit card, make sure that you don’t
use more than approximately 30% of your available funds at once.

2. Excellent for travelling

Credit cards are basically essential travel partners. When you travel
overseas, one of the challenges can be having to get your hands on the
local currency, which is not always easy. With a credit card, you don’t
have to worry about any of that. Yes, you will be charged fees if you
use your card overseas, but these costs are minimal compared to what
traveller’s cheques and international ATM fees will cost you. Other
benefits that credit cards offer in terms of travelling is the fact that
you can collect air miles, which, when redeemed, can make a huge
difference when buying your next air ticket. You will get access to
exclusive airport lounges as well as concierge services. Some other
travel benefits include:

3. You get rewarded

Most credit card companies offer various perks when you use their
credit card, such as rewards programmes. The more you swipe, the more
points you accrue towards things such as frequent flyer miles and
various services and products. Rewards programmes offer cash back or you
points accrued can be redeemed for entertainment, travel, accommodation
and car rental discounts, hotel room upgrades, as well as product
discounts or gift vouchers from participating stores which is perfect
for birthday and Christmas shopping, for instance. Some of the best
credit cards can earn you as much as 1-5% back on your purchases, which
means cash in your pocket.

Different types of cards will give
you different types of point accrual systems, and a rule of thumb is:
the more exclusive the card, the quicker you earn points for each time
you swipe. Some business credit cards even give you points for
advertising in select media, filling up at certain petrol stations,
which points can be used towards certain business expenses and computer
hardware, for instance.