30 - 2013

Five Reasons Why Credit Cards can be Better than Cash

Upon hearing the words ‘credit card’, some people instantly think about debt. Whilst it’s good to be a little cautious about lending money, as this is what makes a responsible and sensible consumer, you should know that there are many ways in which some credit cards can actually be pretty helpful. In some ways, credit cards can be better than cash. Let’s take a look at a few:

Credit cards allow you to spread the cost of a large purchase

Not many of us have enough money in the bank to make a large purchase outright, but this isn’t to say that you won’t be able to afford the purchase if the cost was spread out across a period of a few months or a year. This is when credit cards are ideal, as they make large ticket purchases more affordable. If you pay your balance off in full, you won’t have to worry about interest either.credit-cards

Some credit cards give you rewards for spending

When you hand over cash at the till, you don’t get anything back for making a purchase. However, with some credit cards, you can earn cash back  loyalty points and rewards for every pound you spend. This helps you to get the most from your spending.

Credit cards offer you protection on your purchases

If you buy something with a credit card and it turns out to be faulty, or it is supposed to be delivered but it doesn’t turn up, you will be able to claim your money back. You can do this when you pay with other methods, but only with credit cards do you get protection for purchases costing up to a massive £30,000.

Credit cards help you to improve your credit rating

By borrowing money and paying back every penny on time, you can build up your credit rating. If you only ever spend using cash or your bank account, you will end up with no credit history. This could mean that the next time you compare credit cards and put in an application, you will be rejected because lenders are wary of lending to customers with no proven track record of borrowing money and paying it back.

It is important to remember that credit cards can only ever be better than cash if you use them responsibly. You need to do your homework to find out how credit cards work, read all the terms and conditions, spend wisely and always pay your credit card bill.

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