Reaping the Hidden Benefits of Credit Cards
2009-06-19 by Lee
2009-06-19 by Lee
While known for high interest and fees, credit cards have many benefits for knowledgeable consumers. Many consumers look to credit cards for convenience, and indeed, the “buy now and pay later” mantra is becoming the catchphrase of modern consumerism.
Credit cards come with plenty of safety, and for that reason, they are the preferred method of payment for transactions over the phone or the internet. Both the consumer and seller are provided with protections against credit card fraud. The consumer is not held accountable for any charges made with the stolen card, and the seller loses nothing, as its payment is guaranteed by the issuer.
Common misconceptions about credit cards
Some people feel that credit cards are not as safe as the traditional cash or checkbook, but this is simply false. Cash can be used by anyone – it has neither name nor identity, and of course, can be passed easily without identification. Checkbooks can be stolen just like cash, utilized to wipe out the owner’s bank account in a matter of minutes. Credit cards are not attached to any assets or accounts, and they are completely separated from a customer’s assets.
In today’s world, businesses would much rather deal with a credit card than a personal check. Checks are notorious for being held by banks for extended periods of time, and even then, the check might not clear.
Limits on spending
Credit cards even have the advantage over debit cards. Debit cards often have some form of daily limits, or a cap on spending. Credit cards can be used up to their credit line regardless, and sometimes a quick phone call to the credit card issuer is enough to extend another amount of credit to the consumer. Paying for expensive items with debit cards can send the account over its daily allotted amount, pinning the consumer with high usage fees.
Security of payment
Once a payment is made with a credit card, the company gives the consumer instant payment protection. Even months after the payment is made, a dispute can be opened by the consumer through the credit card issuer against the manufacturer for delivering less than quality goods. Some credit cards even extend the warranty that comes with the product or service purchased.
Many people use credit cards for budgeting. Each month, the bill comes completely itemized and contains all the expenditures from that month. The consumer can see on just a few pages of information how and where each dollar was spent. Many businesses use just one creditor for all their purchases, protecting them from fraud and to keep all expenditures in one main account.
Credit cards are also tied to your credit scores, which can impact how much you spend on certain products. The price of home mortgages, credit card rates, and auto insurance is dictated somewhat by the credit score of a purchaser. Lower auto insurance rates are given to consumers with the best credit, mortgage rates are very much affected by credit scores, and sometimes landing a job can be difficult with low credit. Therefore, utilizing your credit cards intelligently can benefit your overall financial health.
Credit cards come with plenty of safety, and for that reason, they are the preferred method of payment for transactions over the phone or the internet. Both the consumer and seller are provided with protections against credit card fraud. The consumer is not held accountable for any charges made with the stolen card, and the seller loses nothing, as its payment is guaranteed by the issuer.
Common misconceptions about credit cards
Some people feel that credit cards are not as safe as the traditional cash or checkbook, but this is simply false. Cash can be used by anyone – it has neither name nor identity, and of course, can be passed easily without identification. Checkbooks can be stolen just like cash, utilized to wipe out the owner’s bank account in a matter of minutes. Credit cards are not attached to any assets or accounts, and they are completely separated from a customer’s assets.
In today’s world, businesses would much rather deal with a credit card than a personal check. Checks are notorious for being held by banks for extended periods of time, and even then, the check might not clear.
Limits on spending
Credit cards even have the advantage over debit cards. Debit cards often have some form of daily limits, or a cap on spending. Credit cards can be used up to their credit line regardless, and sometimes a quick phone call to the credit card issuer is enough to extend another amount of credit to the consumer. Paying for expensive items with debit cards can send the account over its daily allotted amount, pinning the consumer with high usage fees.
Security of payment
Once a payment is made with a credit card, the company gives the consumer instant payment protection. Even months after the payment is made, a dispute can be opened by the consumer through the credit card issuer against the manufacturer for delivering less than quality goods. Some credit cards even extend the warranty that comes with the product or service purchased.
Many people use credit cards for budgeting. Each month, the bill comes completely itemized and contains all the expenditures from that month. The consumer can see on just a few pages of information how and where each dollar was spent. Many businesses use just one creditor for all their purchases, protecting them from fraud and to keep all expenditures in one main account.
Credit cards are also tied to your credit scores, which can impact how much you spend on certain products. The price of home mortgages, credit card rates, and auto insurance is dictated somewhat by the credit score of a purchaser. Lower auto insurance rates are given to consumers with the best credit, mortgage rates are very much affected by credit scores, and sometimes landing a job can be difficult with low credit. Therefore, utilizing your credit cards intelligently can benefit your overall financial health.
