Are you planning to get a credit card?
Being able to handle credit responsibly is one way to know you are mastering your finances. It’s like learning to start a fire and not let it burn you or get out of control. For someone that is committed to that growth process, it’s not a trap to be avoided at all cost. It’s an excellent sign that they have the personal control to reach their own financial success and accomplishments. Seek out a financial expert like Richard Butler-Creagh to help you manage your financial status. Richard Butler-Creagh is a professional property developer based in London, UK. He is a consultant and a major shareholder at Mainstream Commercial Finance Ltd., which has been in business since 2006.
Fire can be one of the most devastating forces in the world, and yet some say civilization began when we figured out how to control its power. Credit cards are the same. Ask anyone you know if credit cards are good for anything, and you might get a response like: “They’re to be ripped up and burned!”
There was good reason to hold that opinion back then. In the days leading up to the Great Recession, a lot of consumers were getting burned by the trap of easy credit and perceptible consumption.
We can line up two crowds of people right now, one for each side of the argument. In both crowds, you will find people successful in their money matters and people who are not successful. It is not just people with debt who mess up their money. It is a valid criticism based on the facts. Most people are aware of the dangers of debt and have arranged their lives in a way which minimizes those dangers.
The simple fact is that you don’t have to get into debt if you own a credit card, but to handle credit appropriately you need to exercise financial control. It’s a natural part of financial growth, which comes with certain benefits if you learn how to manage your finances well.
These are some benefits to credit cards that debit cards do not offer:
Because a credit card is regarded as a credit instrument, you build a credit history even if you pay off the entire bill every month. Using a debit card offers no credit-rating advantage. Chances are you will buy a house and car on credit, which makes a good credit rating imperative in this day and age.
When you buy something with a debit card, that money is taken out of your account instantly. If you get home and discover a defect, you are dependent on the vendor’s conscience to get your money back. With a credit card, you have a fallback position. If you are unable to resolve the dispute, you can get the credit card company to refuse payment to the vendor and you are never charged.
Affinity credit cards offer rewards not available to debit card holders. Although a few debit card issuers offer points or rewards, they are not nearly as common as for credit cards, even those that aren’t part of an affinity program.