by Katerina Nikolas

Created on: January 16, 2010   Last Updated: December 21, 2010

If you are the kind of person with the financial skills to help yourself rather than your bankers, there are good solid reasons for having a credit card. In fact there are many benefits for the type who is responsible with money, and adept at meeting monthly bills on time.  Here are the benefits to the astute card user who takes a credit card with no annual fee and pays it off on time each month.

Responsible use of a credit card helps to provide an excellent credit score, which is vital in so many areas. Good credit indicates a good financial reputation which will result in access to preferential mortgage rates and insurance premiums. Paying your credit card on time shows responsibility which in turn influences potential employers who have the right to check credit reports before hiring.

Whilst your savings and spare income sit in the bank earning you interest you can buy yourself up to an extra 45 days by using your credit card for everyday purchases, thus adding interest constantly to your savings balance. Generally, as well, your card will give you an extended warranty on goods purchased, which is a great benefit to have, making it easier to turn down the extended warranty the retailer is no doubt trying to sell you.

Carrying a credit card means you don’t need to carry cash around, which can be a more risky business. If you are mugged you can report your credit card as stolen and have it stopped immediately, whilst if a carrier bag of twenty dollar notes was stolen from you the chances are you'd never recover them. 

Credit cards mean you can pay straight away in an emergency situation, without having to attempt to drive your broken down car to the cash point to withdraw cash to pay the nice garage man who is offering to tow you out of the roadside ditch.

You can benefit by using your credit card for telephone and on-line purchases, because it makes this kind of purchase so convenient.  At the same time it is giving you a built in insurance if there is a dispute regarding the delivery of the goods, or a problem with them. Whether used on-line or in person with a retailer, the benefit of using a card is the intermediary aspect the card issuer will provide, of dealing with a consumer complaint such as a faulty item. The credit card issuer has the extra clout to make sure any complaint is dealt with efficiently and promptly. 

An additional benefit of credit cards is the insurance cover. It will cover you for theft or damage of goods purchased within a certain time frame, and may also cover car rental insurance and travel insurance. Check with the individual issuer to see what insurance benefits they offer on each card.

Finally there is the reward aspect of using a credit card, be it in redeemable points for such things as air miles or other goodies, or cash back on money spent on the card. Check to see which kind of reward you'd appreciate having and rack up the points by putting most of your monthly expenditure on the card, and then repaying it in full from the money accumulating interest in your savings account.

So if you are savvy with your finances the benefits of having a credit card are certainly there, as you acquire insurance extras, peace of mind in emergency situations, and points which can save you money. You will accrue interest on your money by using it in a delayed fashion by opting for the card payment, which you will always, always, pay off in full each month, thus spending nothing at all on your credit use.

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