Having a credit card is a great responsibility, one that even seems odd that you can trust someone just out of high school in signing up for one. Just because you have a credit limit doesn’t mean that you can spend that much, in fact, you need to pay the balance by the statement due date otherwise you get charged interest, so it takes getting used to the responsibility of having one, but in fact it’s actually a good idea to use on for every purchase you make, if you can handle it.
Don’t Risk Your Bank Account Getting Wiped Out
There is so much fraud these days that you never know when your information could be compromised, whether it’s skimming at the gas pump, or a big corporation getting your information hacked, it happens all the time. For those that try and steal your card’s information, it’s better if it was a credit card over a debit card because if your debit card gets hacked, it’s money coming out of your bank account while you dispute the charges, with a credit card, there’s no worry about your bank account getting wiped out.
A Large Hold on Your Account Can Set You Back
Much like getting your debit card wiped out for fraud while you dispute the charges and wait for the funds to return, same goes for a hold on your account when you use a debit card to book a hotel room or rental car. The hold may be a few hundred dollars and could take a week or two to come back into your account. With a credit card, it doesn’t matter when the hold comes off, because you will not be responsible for that balance anyways.
Use Even just for the Rewards
Once reward became a large part of having a credit card is when it really became a game changer. There is so much competition between cards, so if you can find the card with the best rewards, whether it’s points or actually cashback dollars, you will earn on just making the purchases you would normally be making anyways, so if it’s free few hundred dollars a year just by using your credit card over your debit card, why not, and never pass up free money. You just have to be careful not to start making extra charges just to earn more rewards.
Grace Period Paying Back
While a pro for some and a con for others could be the grace period on paying back on purchases made with a credit card. Since it doesn’t immediately take from your bank account, you accumulate charges throughout the month and then the balance is due next month. Pay the full balance and you will not have to worry about interest, but continue to carry a balance over to the next month and you could be in for a financial disaster to come, if that balance starts to grow and little of the principal balance is chipped away and the debt starts to pile up.
