Why do we use credit cards?

Why Do People Use Credit Cards?

• Answer:

  Are you interested in getting a credit card? Many people use credit cards today, but it is important to get the facts about them before applying for one. Read this article to learn why people use credit cards. Function People can use credit cards to purchase practically any item in the world. You can use credit cards to buy things such as food, clothing, gasoline, books and videos, and to pay bills, rent cars and make hotel reservations. However, to use credit cards, you must first get approved for one. Many banks, credit unions and department stores offer a variety of credit cards. However, the creditor must verify that you are a good candidate for credit and that you are financially able to repay the debt. Your line of credit is normally determined by your credit history, income and current expenses. Types There are many different types of credit cards available. For example, credit cards are typically classified as standard, secured, business, merchant (retail and gasoline), travel and entertainment, prepaid, low-interest, those that offer reward programs and bank credit cards. There are normally certain rates and interest fees that apply to every type of credit card. Not all people qualify for every kind of credit card, but many people are approved for more than one type of card. Basically, all credit cards come with their own features and perks, but keep in mind that all credit cards are not a good match for everyone. Benefits There are several benefits of using credit cards. For example, many people prefer credit cards because they are convenient to use and it is easier to take them with you instead of carrying a lot of cash. And if your wallet or purse is stolen, you can simply call the creditor and close the credit card account, hopefully before anyone uses the card. Another reason why people use credit cards is because you can immediately buy things that you need and you can pay for them later. Also, it is a good idea to have at least one major credit card just in case an emergency arises, such as unexpected medical bills or car repairs. In addition, using credit cards allows you to build a positive credit history, which will help you when you decide to purchase a car, home or other important items. Warning Although a credit card is a beneficial financial tool, you can accumulate a lot of debt if you are not careful. And if you fall behind on monthly credit card bills, creditors normally apply late fees, and the company may report this negative information to the three major credit bureaus. Also, if you go over your credit limit, the creditor may charge you an over-the-limit fee as well. Expert Insight Credit cards come in handy, but it is important to live within your means and not to spend more than you can actually afford. If you ever find yourself experiencing a financial hardship, you should contact the creditor as soon as possible to discuss your options with them. Quite often, a creditor is willing to work with individuals to help them through their financial crisis.