The Advantages Of Using A Credit Card
People can get nervous about credit cards. While it is true that if used incorrectly people can get into debt if used in the right way they can be very useful. In this article, we are going to look at the various advantages of using a credit card, as well as tips to make sure that you get the most out of them.
Spreading the cost
One of the major advantages of using a credit card is being able to spread the cost, especially if it is at zero percent interest. This means that something that you may not be able to have afforded for a long time becomes more accessible, provided that you pay off what you owe during the interest-free period (this will depend on what the card issuer will let you have, so make sure you shop around before choosing a card.)
One of the biggest benefits with using a card is protection – for example, if you book a holiday using the card and the provider goes bust then you will get your money back, something that may not happen if you pay in cash or via a debit card.
A lot of providers offer rewards such as cashback or air miles. However, it is important to note you only really get the benefit if you pay what you owe, or the interest will be higher than the value of the rewards that you receive.
Could help clear debt
If you have expensive store cards, it may be possible to switch the debt to an interest-free card. While you may have to pay a transfer fee, it is likely that this amount is likely to be less than the interest you are currently paying. Provided you then clear the debt by the end of the interest-free period you could potentially save yourself problems in the long term.
Be credit savvy
It is important to emphasise that used responsibly there are a lot of advantages with using credit. However, it is vital that you do not get caught in a cycle of debt, using one card to pay off another over time, especially if you do not keep up the repayments as this can cause problems to mount up.
As with any purchase, it pays to shop around, compare the various options that are available to you and consider what is most appropriate for your own individual circumstances.
We can help
At Larcomes Financial Services our motto has always been “Big enough to specialise, small enough to care.” We know that it is not always obvious what the right move is when it comes to your finances, so we want to give you the information you need to make the decision that is right for you.