May 25, 2005

What are the benefits of owning a credit card? This is something that you should ask yourself before you go ahead and apply for one, to make sure that it is the right thing for you to do.

So by giving you some of the advantages of a credit card, it will hopefully help you get further down the road, in making your mind up, if it is right for you or not, but ultimately only you can make the final decision on your own finances.

Advantages of a credit card, well one is that you have the option of this day and age of going online to buy goods from the comfort of your own home, this means you can surf the internet and get yourself the best deal possible, saving you money which can be a good thing also if you are a borrower on a credit card, so savings can be put towards your bill, leaving you less interest to pay.

Buying tickets for concerts, theatres or the cinema can be made over the telephone using a credit card, thus meaning no standing in queues once you get there, giving you more time in the restaurant or bar before hand. These are just some of the advantages of purchasing goods using your credit card.

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Financially can be used to help you when you find you are short of cash and there is still about two weeks before that monthly pay check hits the bank account, giving you a little more financial freedom and leaving you in the position of being in charge of your own cash flow and not having to borrow from family and friends. (We all know how that can end up)

Right now a credit card can also let you use the card to your advantage by having the facility to make cash from owning one, though this can only be done if you are a payer, who clears their balance at the end of each month. This can be done either with a cash back credit card, where the issuer will pay anything from 0.5% -2% on the total of purchases made back to you in a lump sum at certain times of the year or once a year.

Another advantage if you are someone who likes a clean statement at the end of each month, is by taking advantage of a 0% deal right now. This can be done by spending on your credit card as you would normally, but the twist is you only pay back to the issuer the minimum payment asked for at the end of the month and put what you would normally pay into a high interest savings account. Then by the end of the 0% period, which is usually 6 months to 12 months (the longer the better) you take out of the savings account, what you owe in a balance to the credit card company and clear it off, leaving in the savings account the interest accrued lying there waiting to be spent, basically free money.