Advantages of owning a credit card

Here are the advantages of owning a credit card:

Free credit if used correctly
Generally Credit Card companies don't charge any fees if money is repaid on time. Most don't charge an annual fee, although some are starting to levy them. If your provider wants to charge you an annual fee consider taking your business elsewhere.

Spend now pay later
If you pay off the full balance at the end of the month then you've earned 'free' money because Credit Card bills are settled about a month in arrears, the so-called grace period. Time your purchases right and it's possible to get up to 50-60 days of interest free credit.

Loss Protection
There is far more security for paying for goods with a credit card than with cash. Should your card be stolen it just takes a simple call to your provider who will put a stop on it and issue a new card.

Use a card to rebuild your Credit Rating
Having a good credit file is so important as it offers you financial options. Financial options improve your chances of being offered loans or finance for a mortgage, a loan, another credit card, 0% deal on a TV etc. One way to improve a credit rating is to ensure that your monthly repayments on a credit card are always up to date, so building up a responsible profile with the credit rating agencies.

0% Balance transfers
These enable you to transfer a balance from one Credit Card to a different one that perhaps is charging less interest, usually for a specified period of time. Note there is a one-off fee charged, normally 2.5% of the amount being transferred.

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Now that you know some of the advantages of the credit card, my next post is on the disadvantages of the credit card.

Please use the above information to good use. Think of why there is a need for a credit card. And which part were you able to get it wrong and because of that, you are now in great credit card debt.