Many people use credit cards irresponsibly and end up in debt. That’s why financial experts advise against using credit cards. However, if you can use a credit card responsibly, you’ll be able to keep cash transactions to a minimum and benefit from a number of perks. We’ve created a list of reasons why we think credit cards are a good choice:
One-Time Bonuses
When you get a new credit card, it feels great to get an initial bonus opportunity. Sometimes, applicants with excellent credit or good credit can get approved for credit cards that offer bonuses worth $150 or more (maybe much more). All you have to do is spend a certain amount in the first several months that you open the account.
Other cards entice applicants with miles or bonus reward points that can be redeemed for gift cards, checks, travel, statement credits, or merchandise.
Cash Back
Earlier, credit cards used to offer a 1% rebate in the form of cash back. Today, some cards offer between 2 to 3%, or even about 6% on selected purchases. The best cash-back credit cards are those that charge minimal interest and fees, and offer a higher rewards rate.
Reward Points
For every dollar spent, credit cards allow cardholders to earn one or more points. Several reward credit cards provide bonus points for fixed categories of spending like gasoline, restaurants, or groceries. Once a certain threshold is reached, these points can be redeemed for gift cards from restaurants and retailers, merchandise items through the card company’s online rewards portal, and travel.
Frequent-Flyer Miles
Today, almost all airlines offer at least one credit card in partnership with major credit card issuers.
Generally, cardholders earn miles at a rate of one mile per dollar, and lower-end cards that have no annual fee sometimes offer one mile for every two dollars spent. The value of these rewards depends on the type of ticket you purchase with your miles or points.