Credit cards: The best way to use them

There are a lot of things to understand when using a credit card. The fact remains that without proper knowledge about everything there is to know about credit cards, they can put you into immense debt.

That said, credit cards are a massive part of financial institutions. They are a mode of transaction that allows a client to get loans for whatever reason. For example, let us imagine a client wants to get a commodity but does not have enough money. They can use their credit cards to get that commodity. They get the item because they have an existing agreement with a financial institution. The terms and interest prices depend on a client’s age, credit score, and how much they get on average.

Since the credit card was invented, clients have made both wise and unwise decisions regarding purchasing items. This article highlights some smart things you can buy with your credit card and some unwise purchases you can make.

Man using Credit Card

Smart Purchases to Make With Credit Cards

  1.  Any expensive item. When a client wants to purchase something, their best option is to buy with a credit card. A credit card has the edge over other types of payment methods or cards in this regard. When a client purchases something with a credit card, the client does not have to worry about damage and theft. This safety perk is because there is a particular type of insurance attached to credit cards. Most credit cards offer a 90-120 day insurance on anything you buy. This means that the insurance would assure safety for virtually anything you buy with a credit card. The insurance will protect it for up to four months.
  2. Gasoline: This sounds like a peculiar thing to buy with a credit card, but it is a very wise commodity to purchase. Most credit cards have extra discounts on all utility purchases like electricity, water, and gas. Another reason to buy gas with credit card is the safety it brings you. Reports have shown that most thieves steal card information from gas stations. Pretty surprising, right? That said, when a client uses their credit card, they are less susceptible to theft. This perk happens because n credit card has different measures that make a client liable to lose a maximum of $50.
  3. Restaurant Food: Although restaurant food is one of the most purchased commodities, it does not dispute it as a smart purchase. Several financial institutions offer its clients different discounts when they buy food commodities; restaurant food included. Aside from that, they also protect a client from theft. Restaurants are prevalent places where thieves steal card information. Whether a client chooses to pay with any type of card at a restaurant like most places, they decide to let someone know and walk away with their card details.
  4. Travel: A credit card is an undeniable choice to use for travel. We say this because it protects you from any unforeseen circumstances. These may be trip cancels, trouble with buying tickets, amongst other inconveniences.
  5. Hotel and Rentals: Whether you want to rent a car or book a hotel when you travel or want to do both within the town, they are still an excellent choice when purchasing. The truth is, most hotels and other establishments prefer when a client uses a credit card when they want to make a purchase. Some even make it a policy that clients can’t use any other payment form aside from credit cards. They also come with a lot of discounts and other rewards.
Man holding Credit card

What Not To Buy With Credit Cards

As much as credit cards are a better choice when making individual purchases, there are also some things to never buy or pay for with a credit card. They are:

  1. Tuition: This is an unwise purchase option to make. This fact is because when paying for education with a loan, the financial institution attaches massive interest prices. Some clients think this is a smart option for paying for tuition because it allows them to pay later. This doesn’t seem right. Instead of using a credit card, try out other payment methods for education. It would cost you less in the long run.
  2. Weddings: Paying for expenses related to weddings with credit cards is a bad idea. They attract very high-interest prices. Furthermore, clients can easily forget that they have so many outstanding payments because, during weddings, they purchase a lot of items and commodities. This item could be the bouquet for the wedding or even something as simple as rentals for wedding cutlery. It is also an unwise decision for clients to start the rest of their lives with their significant other in massive debt.
  3. Taxes: Clients should never use credit cards to settle any form of taxation. The Internal Revenue Service makes room for people who can’t meet up to their tax payments in time to use credit cards. However, the interest prices and additional expenses that come into play when paying taxes through credit cards makes you wonder if this is a smart choice at all. Moreover, paying through credit cards can negatively affect your monetary standing score to a great extent.
  4. Mortgages: Whatever happens, a client should never use their credit cards to get a mortgage. Doing this is just getting money from a financial institution to settle another financial institution. No matter who the client is, it is a terrible monetary strategy. Many financial institutions that provide mortgages do not even allow clients to get it through credit cards. However, some accept this method of payment. They charge incredibly high-interest prices. If you want to have a chance at having good control over your finances, or even living credit-free, then remember this one.

What We Think

Credit cards are very much needed in our society today. However, you must evaluate the kind of purchase you’re making to avoid any unnecessary debt being incurred.

Jubril Lawal

Jubril Lawal is a content writer and strategist. He is a student of Obafemi Awolowo University, and is a strong mental health and human rights advocate.

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