Credit Cards: Not All Bad

Credit cards are convenient.

They can be used practically anytime and anywhere. They come with exclusive discounts, cash rewards, online booking, etc. The perks vary with the source. Some health insurance companies have even issued their own brand of credit cards, covering free health exams every year. Education First has the uChoose Rewards program that can get you points for travel, event tickets, merchandise, and more.

One of the biggest benefits of a credit card is having the ability to pay in installments for quality items that could not otherwise be afforded. We’re not saying that a credit card should be used as a free ticket to buy everything you can’t afford to pay for outright. That’s a sure way into debt. But everyone has something special to them that is worth the interest payments.

Credit cards also have benefits aside from short-term gratification.

In the long term, credit cards can help build credit history and raise your credit score. Of course, that is if you make your payments on time and do not charge up to the maximum limit. A good credit history will enable you to qualify for important loans in the future. After all, who would risk lending money to someone who never had a credit card or pattern of on-time payment behaviors in his or her life? In responsible hands, the credit card can serve as a symbol of growing up. A good credit history can enable you to take out a future business loan if you choose to go into business for yourself, or help you obtain a good mortgage loan on the home that you’ll  enjoy with your family.

Handle with Care!

Though credit cards have both short- and long-term benefits, they need to be handled carefully. Everyone should have a budgeting plan for their credit card payments. One a little trick is called the “debit-credit card.” Separate one-third of the money in your account and use that as your self-imposed credit limit. Once you’ve passed that limit, don’t allow yourself to use the credit card anymore during that month. Separate a portion of your income to pay for the installments.

It’s true that if you use a credit card, you’ll end up with a significantly smaller amount of leftover income every month since you are going to need to spend some of your income on credit card payments. Still, credit cards provide flexibility you simply can’t get from cash. Your card can be your go-to in case of an emergency that requires a lot of spending..

So here’s some advice: Get a credit card.

And if you’re not completely certain that you can clear the balance each month, stick to the debit-credit card rule! Click here to see how Education First can help you get a credit card and start using it responsibly today.