Credit cards are the financial superheroes in our wallets. Their secret powers help cardholders build credit, earn rewards, budget their finances, and more. Here’s how credit cards act as financial superheroes in our financial lives and how they make our finances better with their secret superpowers.
Credit Cards: Financial Superheroes & Their Secret Powers
Superheros typically use their powers to make the world a better place. In the same light, a credit card can harness the power to impact your finances positively when used responsibly. From different rewards credit cards to credit-building credit cards, there is a credit card for every need and lifestyle. They hold many advantages for navigating everyday life challenges and financial goals. Let’s unleash the secret powers of credit cards on your finances.
What Are the Superpowers of a Credit Card?
Credit cards carry many benefits for cardholders when used responsibly and strategically. Credit cards affect various aspects of your financial life, which can directly impact all other parts of your lifestyle and well-being. Consider the following credit card features as hidden superpowers which can aid your financial well-being.
| Instant Purchasing Power | Enhanced Security | Convenient Payment Options |
| Rewards and Perks | Credit Building | Budgeting and Tracking |
Instant Purchasing Power
With instant access to funds, cardholders can shop without carrying cash with a credit card. Most convenient for larger purchases. Today, most establishments accept credit cards as a payment. Additionally, credit cards can be used online to make purchases from the comfort of your home and even on your mobile device.
Mobile devices also have the convenience of storing your credit cards virtually on a mobile wallet for use out in the world or online. And if you have to make an emergency purchase, having instant purchasing power would come in handy to finance a surprise cost. For example, a credit card can be used to pay for a mechanic if your car breaks down. Or maybe your a/c or heater breaks down and needs fixing. A credit card can help you pay for unexpected repair costs if you do not have the cash right away
Enhanced Security
Credit cards are well-known for their security features. Often it is recommended to pay for your purchases with a credit card instead of a debit card. While a debit card does have certain protections, nearly all credit cards offer security features like zero fraud liability on unauthorized charges. Credit card companies carry the responsibility by being liable for fraudulent activity, a noteworthy secret superpower for cardholders’ finances.
Convenient Payment Options
With the convenience of credit cards, payment options are abundant. Financing daily purchases and even big-ticket purchases is made easy with credit cards. They offer the ability to budget your money by breaking up your purchases into smaller payments. With smaller payments, you can stay organized. Manageable payments allow cardholders to make expensive purchases on a budget.
For example, with a credit card, college students (or their parents) can purchase college books, laptops, tuition, and more. All of which are expensive purchases. However, making these purchases with a credit card can help break up payments into a more budget-friendly and manageable monthly cost.
Rewards and Perks
Probably the most well-known sought-after feature of credit cards is the reward-earning potential some hold. Different types of credit cards and rewards credit cards incentivize cardholders for their purchases. Card members can earn cash back, points, or miles, depending on the credit card type. However, some credit cards do not earn rewards but may have other perks like no annual fees, no foreign transaction fees, auto rental insurance, and more. The top credit cards on the market today might offer additional benefits like travel credits, dining credits, subscription services, and more.
Credit Building
Credit building is vital to your financial health, and credit cards are often the best way to build credit. Using a credit card responsibly truly unleashes the power of credit building. Good credit-building habits include never missing a payment, paying on time, and keeping your credit utilization under 30%. There are also credit card options for anyone interested in fixing their credit, for example, secured credit cards.
| Card | Features | Annual fee |
|---|---|---|
First Progress Platinum Elite Mastercard® |
|
$29 |
OpenSky® Secured Visa® |
|
$35 |
Self Visa® Secured Credit Card |
|
$25 |
First Progress Platinum Select Mastercard® |
|
$39 |
Budgeting and Tracking
Last but not least, credit cards come to the rescue with their budgeting and money-tracking powers. Using your credit card for purchases means you will have a detailed monthly statement which can aid in helping you stick to a budget and understand where you can improve your spending habits. Credit card apps usually have helpful tools like setting spending limits and data on your spending categories.
Related Article: How To Manage Money With The 50/30/20 Budget Rule
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