5 Ways Credit Cards Can Be Good for Your Budget

credit cards

credit cards can be goodWhen you think about using a credit card, you might think about them in a negative light. Obviously, running up credit card debt is not desirable for your financial future, so many people choose to avoid cards altogether because of this concern.

However, when used correctly ? and responsibly ? credit cards can be good for your budget. They are actually be a useful financial tool with almost no downside.

If you are trying to decide whether or not you should start using credit cards in your day to day life, consider the following ways credit cards can be good for your budget.

Build Credit Score

This is the point that most people know about, and it is extremely important. Using a credit card, and then paying if off?on time each month, is a great way to build up your credit score. You will be essentially ?proving? your ability to pay off debt, so creditors will be more likely to lend you money in the future for larger purchases like a new car or house.

Save on Interest Rates

Tying in to the point above, you can save money down the line thanks your higher credit score. A higher credit score can help you by securing loans with lower interest rates. You will be seen as less of a risk when you have a good score, which you’ll have built by using your cards responsibly.

Get You Through a Month

You naturally don?t want to have to carry credit card balances for long periods of time, but carrying a balance for just a single month won?t cost you much in interest if you need to work your way through a big purchase. If there isn?t room in your budget for a purchase that you need to make now, using a credit card to give yourself a few weeks of time to put that money together is a reasonable option. That being said, if you don’t know where the money is going to come from them you should steer clear of using that credit card.

Earn Rewards!

Who doesn?t love getting free stuff? If you use the right credit card on a regular basis, you might find that you accrue a variety of rewards that you would not have earned by simply using a debit card. The best part is that this strategy doesn?t need to cost you anything at all, and it won’t as long as you are paying off your statement balance by the due date each month. Look for a card that offers rewards which interest you, like travel rewards or cash back, and make sure there is no annual fee that goes along with it.

Learn Money Management

It can be tempting to have a big credit line at your disposal. But holding a credit card or two is a great way to teach yourself how to manage money properly. You can use your cards to purchase things that are within your budget and you were going to purchase anyway, but resist the temptation to buy things that you don?t need and can?t really afford. Money management is an essential skill to learn and can be easily taught with credit cards.


Do you use credit cards for any of these reasons? Can you think of other ways credit cards can be good for your budget?


Photo courtesy of: Sean MacEntee

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