In this article we will focus on explaining reasons for having a credit card. In no way we want to promote indebtedness or encourage you getting yourself into more debt. We will only explain advantages of credit cards if they are used wisely. Credit Cards can be bad masters, but if you stick to the rules, they can be wonderful servants and usefull tools.

If you don’t have a credit card yet, it’s a good idea to get one. Having a credit card in todays world is almost a necessity. As pointed out already, getting your self into debt is not a great idea, but if you can manage it and stay disciplined then credit card can be a handy tool costing you very little money. In some cases in may be totally free and even pay some money back if you choose the right credit card reward program.

The reasons for credit card being a necessity today is that certain things you can get only on credit card, like hotel bookings, rental cars, an so on. Especially important thing is having a credit card when traveling. Some budget airlines today allow on-board purchases only with credit card payments. If you don’t have one, have no packed meal with you and are on a 10 hours flight then lack of credit card can be a bit inconvenient. Airline will probably serve you with free water, but you will stay hungry during the whole flight. So, here are the 5 main reasons to get a credit card:

(1) Make certain purchase available to credit cards only

Being able to book flight tickets, hotels, rental cars or making shopping online. So if you plan on traveling then credit card is basically a must.

(2) Increased security for certain purchases

If something goes wrong with the purchase, like goods not being delivered when purchased online or there are quality issues the you can claim money back from your bank. You won’t be able to do that if goods purchased with cash or debit cards.

(3) Cooling off period

For every purchase on credit, including credit cards you have 3 working days to change your mind and return the goods to the store. This “change of mind” policy does not apply to cash purchases. Not many people are aware of this important right they have as consumers.

(4) Getting some money back in form of cash-back or reward points programs

There are many rewards programs offering so called cash-back options, ranging from 0.5% to 1.5% rewards. Some will give you the cash or points immediately, with other you will have to wait even a year for the cash or points to be credited to your account. The best programs are obviously those who give you the highest ratio of your spending back and give it immediately without too much waiting. There are also different joining fees included, so calculate how much are you going to spend in a year, how much you get back and what it will cost. Then choose the most rewarding program.

(5) Some credit cards offer extended warranties for goods purchased with them

Usually this type of purchase protection is offered by gold credit cards or low interest credit cards that charge higher account maintenance fees. But it’s not always the case, so check with your bank first if this type of benefit is included with the credit card you intend to apply for.