Once you realize it’s all about how you use them, credit cards are no longer the enemy — they can actually help in 3 ways

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When you pay off your balance in full each month and only spend as much as you can afford to pay off, credit cards can actually do good rather than harm.
Using a credit card responsibly can improve your credit score by positively impacting your credit utilization and payment history.
Beyond that, credit cards can get you perks like intro APR offers to pay off large purchases without interest, plus welcome bonuses of cash back or rewards points.
Be honest with yourself: If you don’t think you’re in a place to use a credit card responsibly, you shouldn’t open an account. Any rewards and perks you’ll earn are worth far less than the interest you’ll be charged for overspending.
See Business Insider’s list of the best rewards credit cards »

With credit card debt on the rise and many millennials sticking to debit cards, it might seem logical to conclude that credit cards are bad. But while the dangers of credit card debt and overspending are very real, labeling all credit cards as bad overlooks one major truth: It’s all about how you use them.

By not charging more than you can afford to your card and paying your balance in full each month, you can reap lots of rewards from using credit cards. Not only can using credit cards responsibly help you improve your credit, but it can also earn you travel rewards and cash back.

3 benefits of responsible credit card use

Credit cards offer many types of rewards, and responsibly managing a credit card account or two can even help raise your credit score. Of course, that’s only if you use them responsibly — by paying off your balance in full each month and only charging what you can afford to spend. Basically, treat your credit card like a debit card, and don’t use it as an excuse to overspend.

Credit cards can raise your credit score

If you pay them off every month and avoid carrying a balance, credit cards can help raise your credit score. Payment history and credit utilization are two of the biggest factors that make up your credit score, so making on-time payments and responsibly managing a credit line will help, rather than hinder, your credit. This is one reason that parents might choose to add a child as an authorized user on their account — doing so helps their child build credit, as their parents’ credit card account activity will be reflected in their credit score.

Intro APR offers can help you finance large purchases and pay down debt

Using a card with an introductory interest rate offer could help you pay down your credit card debt and/or finance a purchase that you’d otherwise have to get a personal loan for. Also keep in mind balance transfer credit cards, which let you consolidate debt and pay it off with an intro APR offer. Remember that the introductory interest rate is temporary; you’ll need to pay the balance in full by the time the offer …read more


Source:: Business Insider

      

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