Many people still use cash or debit cards to pay for everything they buy, either because they are uncomfortable using credit cards, they don’t understand how credit cards work, or they don’t want to waste their time. . to change their habits.
But every time you use your credit card to make a purchase, you get something in return – or at least you do if you’re using it. right credit. Many credit cards earn rewards like refunds or flight miles, while others have features to help you pay your current debt or finance a large purchase over time no interest. And some Credit cards offer protections when traveling in case you have problems during your trip, or purchase protection If an item you purchased is damaged the next day.
There are many benefits to having a credit card, so 2022 will be the year for you to ditch that debit card and start using a card that gives you something in return. Let’s see what you’re missing out on by not using a credit card, with these 6 reasons to get a credit card in the new year.
One of the best benefits of using a credit card is that with most cards you’ll earn rewards for every purchase you make. The most popular types of rewards include refunds or travel points or miles, but there are other options as well.
Merchants are generally not allowed to charge you more for using a credit card to pay for your purchase than with cash or a debit card, and you will never pay interest on a credit card as long as you Pay your monthly bill in full. That means if you’re doing it right, there’s absolutely no point in leaving money on the table with a debit card when a credit card gives you something back without a fee.
Some credit cards even offer what we call a “bonus portfolio”. This means that for certain categories of purchases – such as grocery, food delivery or even just fill up the gas tank – you can earn extra rewards every time you use your card.
Not every credit card has an annual fee, but some popular cards do, so you need to weigh the cost of the card against the rewards you earn or other perks of the card. But there are many Free credit card every year Earn real rewards for free.
In addition to the rewards you’ll earn on all your purchases, many credit cards offer some Huge signup bonus. This means that by simply signing up for a credit card and using it to spend a certain amount during the first few months you have the card (known as the “minimum spending requirement”), you can Earn a huge amount of instant rewards. get you started in the right direction.
A lot of travel credit card offers benefits that can make your trip more enjoyable once travel resumes after the pandemic breaks out. These perks can include everything from elite status at hotels to exclusive lounge access at airports around the world.
Other credit cards will refund you for certain purchases, such as credits when you spend money at specific restaurants or with certain purchases. food delivery service, or when you sign up for a travel program, such as Global Entry or TSA PreCheck Or check a bag with yours airline credit card.
You’ll even find some credit cards that offer nightly award certificates for free hotel rooms, or even the chance to have a friend fly with you at a substantial discount. So just having a certain credit card can provide an experience you might not otherwise have access to – and even save you money in the process.
Of course, Travel credit card with all these perks usually pay an annual fee – sometimes a large fee. But if you can actually use all the benefits, you’ll find that the value you get from them far outweighs the annual fee you pay for the card.
If you’ve been in debt from using a credit card in the past or some other loan, and the interest on that debt is making it hard for you to cross the water financially, have a credit card that allows you consolidating debt could be the best new year. You can now request.
Some credit cards, when you first get them, offer what’s called introductory interest rate for balance transfer. That means if you transfer your existing debt from another credit card or other type of loan to your new card, you won’t have to pay interest on that debt for a predetermined period of time – usually is between six and 21 months.
Depending on how much current debt you have and your current interest rates, this could mean significant savings. For example, if you’re currently paying 15% interest on $4,000 in credit card debt and you transfer that debt to a balance-transfer credit card with 0% interest for 18 months, you’ll save $900 interest on debt for those 18 months. It’s money you can use to pay off the money you owe instead of seeing it disappear to pay interest.
To transfer existing balance to new credit card, you will normally have to pay a fee – the current standard is 3%. But you’ll save more than that by avoiding the outrageously high interest you’re currently paying on your debt, so you can pay it off faster.
In addition to credit cards that offer an introductory interest rate on balance transfers, some credit cards offer an introductory interest rate on new purchases.
When you first get a credit card with introductory rate on purchases, you won’t pay interest on anything you buy with the card for a set period of time, usually six to 21 months. That means you can afford to make a big one-time purchase – such as an engagement ring – and pay it off over time without having to accrue interest.
Now, debt is one of the big dangers of using a credit card, so it’s never a good idea if you’re using an introductory offer on purchases to buy things you don’t have. ability to pay and not being able to pay off. timely. Because once the introductory period on your new card has ended, the interest rate on any remaining debt will go up to incredibly high levels making it very difficult for you to pay it off.
So although it may be reasonable to use Recommend referrals when buying To spread the cost of a large expense over time or get you through a short period of time when things are tough, it’s a good idea to plan ahead so you know you’ll pay what you owe and only make deals. purchases that you can ultimately afford in the long run.
If you planning a trip in 2022, many credit cards offer the whole travel insurance benefits. These safeguards can protect you if something unfortunate happens before, during or even after your trip.
Some typical travel protection benefits include trip interruption and cancellation insurance, trip delay insurance, lost baggage reimbursement, delayed baggage reimbursement, rental car insurance, accident insurance travel accident and emergency evacuation insurance. Not all credit cards have all of these benefits, and the type of protection that’s most useful to you will vary depending on your situation.
For example, if you’re sick before a covered trip and therefore can’t travel, trip cancellation and interruption insurance on your credit card can help – even if the airline itself won’t travel. fare will not be refunded to you. Some credit cards will even reimburse you for up to $10,000 per person for covered prepaid travel expenses.
Hopefully these are benefits you’ll never have to use, and you’ll need to pay for your trip with the right credit card to get coverage. But travel protection credit card They can be very handy – and save you a lot of money – if and when you need them.
Think of this situation: You just bought a brand new $600 camera, then three days later you accidentally drop it on the floor. The store you bought it from won’t replace it because it was your fault, even though it was an accident. But if you bought that camera with a credit card that protected the purchase, your card will actually cover the cost of repairing or replacing the item, if needed.
The degree of concordance varies quite a bit between the Credit cards offer purchase protection, but you’ll often find that most cards that offer it will cover you for up to 90 or 120 days from purchase, and for $500 to $1,000 per item.
In addition to purchase protection, you’ll also find that some cards offer return protection. If you need to return an item but the seller doesn’t return it, this benefit helps you by giving you a full refund of the purchase price excluding shipping and handling fees.
While this is a perk that has disappeared from many credit cards in recent years, if you use a card with return protection, you’ll protect yourself from any problems with merchants with a refund policy. pay difficulty.
It is paramount to be responsible when carrying a credit card. Friend need to Pay your bills in full and on time every month and make sure you don’t spend more than you can afford. If you don’t feel like you have the discipline to do it consistently, then you may find using cash or a debit card your best bet right now.
But if you’re comfortable with the responsibilities that come with a credit card, owning and using a card can provide you with a multitude of rewards, benefits, and protections. And if you’re not sure which card is right for you, The Money section is underrated by CNN is the perfect place to learn more about credit cards in general, their unique benefits, and the best credit cards on the market today.
So choose 2022 to advance your financial literacy and decide if a credit card can open up a whole new world for you.
Check out CNN Underscored’s list of best credit cards in 2022.
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