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Are Credit Cards Worth it?

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Are Credit Cards Worth it?

You might have come to a point in your life where you’re asking yourself: are credit cards worth it?

When used responsibly and combined with the right strategy, credit cards can offer both short and long-term benefits. Consider the major benefits listed below to decide whether or not it is worth it based on your daily living and goals.

Top 6 Benefits credit cards can offer

Here are Some of the Major Benefits a Credit Card Can Offer You:

Quick and Easy Way To Build Your Credit

Planning on buying a home, a vehicle, or even starting a business one day? A strong credit score can save tens of thousands of dollars over the loan’s lifetime (not to mention, it increases your chances of being approved). There are plenty of strategies to make sure you’re making your monthly payments on time, one of the best perks of the modern era is setting up automatic monthly payments to ensure you never forget to pay your bill.

Makes Large Expense Purchases Affordable

buying a house

Think about the costs associated with buying new furniture, home improvements, weddings – or anything else that requires a large lump sum of cash upfront.
Wouldn’t it be nice to be able to buy them while keeping those costs manageable and within budget? 

Credit cards give you that luxury by breaking the expense into bite-sized payments, so you don’t have to deplete your savings. Instead of having to clip coupons, cancel your subscriptions, walk in the rain to save gas money, etc. or wait months (if not years), you can get whatever you desire quickly. The time you save while not having to sacrifice your quality of life is worth considering. 

Build An Emergency Savings Account

woman sitting on the ground by car

As of 2022, most Americans live paycheck to paycheck, which is scary to think about! Whether it’s a medical emergency, your car breaking down, or losing your job, a well-maintained emergency savings can do more than bail you out when you need it most – the peace of mind it provides daily is priceless!

Credit Cards Are Convenient

man holding credit card

Paying that item over time with a fee can be better than paying something all at once, depending on the situation.

Protection Against Fraud 

They can also be used as protection against credit card fraud. The Fair Credit Billing Act (FCBA) protects you against credit card fraud and limits your maximum liability. This means that you may not be held liable for any amount of fraudulent purchases.

It is important to check transactions on a regular basis. These can be found on your month-to-month credit card statement or online accounts to make sure purchases are correct. It’s easier to track your spending when you keep up with your purchases. 

Increase Your Purchasing Power

The top benefit of a higher credit limit is the ability to spend more on that single credit card, especially if you started with a low limit. There’s no right answer about how much credit you should have. Generally speaking: the higher your credit limit, the better. Being a responsible cardholder that makes their monthly payments on time will improve the odds of getting a larger amount.

Earn Rewards or Travel Mile Points

Depending on the type of card you get, you can earn 1 percent or even 5 percent in cash-back rewards for purchases. The more you use a cash-back credit card, the better! Be careful, though. Pay off your credit card balance in full every month to avoid debt and paying high-interest charges.

To maximize your investment earnings, look for credit cards with no restrictive categories. The more restrictions, the fewer opportunities to cash in and invest your rewards. If you don’t pay for the purchases in a certain amount of time, the cash-back rewards or mile points might not be worth it.

credit card tips

Expectations Of a Credit Card Holder

The responsibilities of a cardholder include reading your card agreement and knowing your terms. To stay out of debt, make payments on time, stay below the credit limit, and you can pay more than the minimum payment. Fraud is out there. Make sure to check your monthly statements carefully and report any lost or stolen cards immediately. Finally, monitor your credit at all times. 

Keep in mind: if you stop making credit card payments, you could not only be charged late fees and higher penalty interest rates, but your credit score can also take a hit. If your unpaid balance goes unpaid for too long, your account may go to collections. 

With responsible usage, the positives far outweigh the negatives. It’s up to you to make your credit card worth it. Despite popular belief, with the right strategy, credit cards can help you save tens of thousands of dollars over the long run. 

Are Credit Cards Worth it? Find Out More

Applying for a credit card doesn’t have to be a hassle. If you’re looking to get connected to an option, Max Cash® has partnered with Credit Hawk! You may be able to find a suitable option for your situation if it is a good fit for you.

Ready to see what options are available to you? 

By Blake Halmerssen

Blake is a seasoned financial analyst. As the head financial writer for the Max Cash blog, he is committed to providing readers with financial literacy and advice.