Whilst using credit cards uncontrollably can negatively impact your financial health, when used in the correct way, there are many reasons why you should own one if you don’t already!
1. Build up your credit score
Yes, you guessed it! Using a credit card to buy things, no matter how big or small, works in your favour as it shows prospective future lenders that you can responsibly use credit. And consistent, responsible usage of credit is critical to building your credit score. Building your credit score may not seem like such a big deal now, but it underpins how lenders see you so not having a credit history can be just as problematic as having a bad history, when you want to get a mortgage on a house or apply for a new credit card. Also te higher your credit score, the better rate you will receive! The score, which is ranked out of 999 makes you eligible for higher loans with lower interest rates as well as credit cards with higher limits.
2. It gives you flexibility
Whilst we don’t encourage you to spend above your means and purchase items you can’t comfortably afford if you know you can afford something but maybe not for a week or two, credit cards can give you access to buy the thing now and pay for it (in full 👀) when your credit card statement is issued to you. This means you don’t have to wait until you have all the cash on hand and can enjoy the item now, but it’s important to note: if you can't clear the balance when you get your statement, the purchase will cost you more than just waiting until you have the cash.
3. Reap exciting rewards
One massive benefit of owning a credit card is the multitude of rewards that are on offer. Some companies offer air miles (thank you Virgin ✨) and other companies offer you cashback. This means that you can choose a card that suits your particular wants and every time you spend money, you are one step closer to receiving that particular reward.
4. A handy emergency blanket
Credit cards can almost act as an emergency fund (but they don’t beat having your own, interest-free, emergency funds) meaning if you suddenly need to cough up some cash, your trusty rectangular piece of metal can save the day. If you face an issue with your car that is urgent then you can pay using your credit card and adjust your budget accordingly so that you can allocate funds to paying that off a few weeks later.