Why credit card is important
Why credit card is important? Since its invention by Frank McNamara in 1950, credit cards have become a very convenient way to transact business all over the world. It has become a safe way to carry money, pay for goods and services, withdraw money from the bank and do many more others.
Because there are different brands to choose from on the financial market, individuals oftentimes are at a loss as to which one to even use. In a year like this, people ask themselves if credit cards are important at all and why? If they are, which one can you get and conveniently use?
In this article, we give you some very good reasons why you should use credit cards.
One-time bonuses for using cards
One of the reasons to use cards is the bonuses you get. Whichever way you consider it, you will definitely transact business, you will definitely buy something. So if you going to use credit cards and you will receive bonuses that you can use for travel opportunities or convert to monetary value and redeem for something else that you would eventually need, why not. Some credit card companies are so generous in this respect that the moment you sign up to use their product, they give you a welcome bonus that can pay for a lot of things and offset some bills for you. Some card companies can give you up to USD 150 as a one-time bonus just for signing up. There are others who would give you up to USD 500 if you spend a certain amount of money within the first three months of usage.
Cash back bonuses for continuous usage
There are other companies that provide cash-back bonuses for continuous usage. This is known as cashback. This kind of gain received massive proliferation in the United States of America by the Discover company. The idea was a very simple one, it went like this: Once this is the card you are using for your patronage, you get back one per cent (1%) of whatever you have spent back as a cash-back bonus.
A lot of credit cards these days give cash-back bonuses to their users. Some companies give back as much as three per cent (3%) cash back, others two per cent (2%) and more. This is one of the reasons why you should consider using a credit card.
Because of competition in the system, lots of companies are increasing the percentages of cash-back bonuses and if you explore the market of credit cards you will find some very good deals.
Bonuses of “miles” award points are given to users
With the clamouring for customers from credit card companies, lots and lots of companies give out awards in the form of “miles”. These miles are points that can be accumulated and redeemed in monetary value and used for travelling or shopping.
Some companies have specified areas, shops or airlines where these points can be used, others allow the customer to use these points at any airline or any shop for that matter.
There are some companies too that reward customers or card users to earn points whenever they use their cards at the gas station and then these points can be converted and redeemed to buy more fuel whenever the customer is in need.
Further still, many others give out gift cards, these cards can be used for shopping, used at restaurants or from any of the areas that the issuing company deems fit.
Better still, there are those whose rewards are in the form of e-gifts, these are mostly the companies that reward for using their cards for online transactions. If you are the kind that does a lot of business online, this is one of the cards you should consider and a very good reason why credit cards are important.
Ease of doing business transactions
Since credit cards were introduced into the global scheme of payment moods the world has seen a rise in cashless transactions. It is one major reason why credit cards are important. With time, the quest to do business across countries and continents keeps growing. People can now place orders for their goods and services several thousands of kilometres away from where they are located and pay for these orders and then have their orders delivered to them. People can in a similar fashion apply for courses in universities far away and with the power of credit cards have their fees paid and then go through years of academic work all through the power of credit cards and cashless transactions. This is one huge leap of the reason why credit cards are important.
Regular flyer “miles” awards
This type of award is one of the earliest awards in the credit card world. It was as far back as the early 80s that airlines in the United States started giving users of credit cards a way to earn awards that could be redeemed and used to travel. The award was so good that even when customers or users of cards were not travelling, they had the opportunity to earn “miles” that could be used to travel. These incentives were given to users whenever they used their cards to patronize goods and services. Sometimes, the awards were given at “one mile per each dollar spent”. Other times, there were cards that would charge no annual fee and would offer “one mile per two dollars”
With these kinds of awards, users could accumulate these miles, redeem them and later use them for trips.
Then there are those airlines that offered “miles” per distance. And with that, users would usually stick to one particular airline and use one particular card, thereby being loyal and then earning a lot of award miles.
Safety
In general, it is very safe to use credit cards for the patronage of goods and services. Credit cards give you an easy and safe way of transacting business without fearing fraud. Except in cases where you make the mistake of giving out your card details to a third party, you can rest assured that, your credit card is the safest way to pay for goods and services.
In conclusion, if you are disciplined in your usage of credit cards, you will realize that it is a very important thing to own and use.
Since you will be “paying” for the credit given to you too, it keeps you in check on how to use money wisely.