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Reasons Why Having A Credit Card Is Important 2025

Reasons Why Having A Credit Card Is Important 2022

Reasons Why Having A Credit Card Is Important 2025

One of the most talked-about financial topics is whether one should own a credit card or not. Many may find credit cards as a helpful tool, while some regard it as unnecessary. But what is the truth behind owning a credit card? 

Having a credit card can offer several important benefits:

  1. Building Credit History: Using a credit card responsibly helps establish and improve your credit score, which is crucial for future loans, mortgages, and even rental applications.
  2. Convenience: Credit cards make it easy to make purchases, especially online or for larger expenses. They are widely accepted and can eliminate the need for carrying cash.
  3. Rewards and Benefits: Many credit cards offer rewards programs, cash back, or travel points, allowing you to earn benefits for purchases you would make anyway.
  4. Emergency Fund: A credit card can serve as a safety net for unexpected expenses, providing quick access to funds when needed.
  5. Purchase Protection: Credit cards often come with benefits like fraud protection, extended warranties, and purchase protection, which can safeguard your purchases.
  6. Travel Benefits: Some credit cards offer travel insurance, no foreign transaction fees, and other perks that can enhance your travel experience.
  7. Budgeting Tool: Regularly using a credit card and paying it off can help you track your spending and manage your budget more effectively.
  8. Access to Higher Limits: Good credit history can lead to higher credit limits, providing more financial flexibility for larger purchases or emergencies.
  9. Introductory Offers: Many credit cards come with promotional offers, such as zero-interest periods on balance transfers, which can be advantageous for managing debt.
  10. Financial Discipline: Using a credit card can encourage responsible spending habits, especially if you commit to paying off the balance in full each month.

While credit cards can provide many advantages, it’s important to use them wisely to avoid debt and maintain a healthy credit score.

Why is having a credit card useful?

Credit cards are one of the most common ways you can build credit and finance large purchases. Plus, many come with additional perks, like the opportunity to earn cash back or miles. However, you should take a minute to consider whether it’s the right time to add a new card to your wallet before you apply.

Having a credit card is useful for several reasons:

  1. Building Credit History: Responsible use of a credit card helps establish and improve your credit score, which is essential for securing loans and favorable interest rates in the future.
  2. Convenience: Credit cards offer a convenient way to make purchases, both online and in-person, without the need to carry cash.
  3. Rewards and Benefits: Many credit cards come with rewards programs, such as cash back, travel points, or discounts, allowing you to earn benefits on your everyday spending.
  4. Emergency Access to Funds: A credit card provides quick access to funds during unexpected expenses, acting as a financial safety net.
  5. Purchase Protection: Credit cards often include features like fraud protection, extended warranties, and purchase protection, which can safeguard your purchases.
  6. Travel Perks: Certain credit cards offer travel benefits, such as travel insurance, no foreign transaction fees, and airport lounge access.
  7. Expense Tracking: Using a credit card can help you track your spending more easily, as statements provide a detailed record of your purchases.
  8. Introductory Offers: Many credit cards feature promotional offers, such as zero-interest periods for balance transfers, which can help manage existing debt.
  9. Higher Spending Limits: Good credit history can lead to higher credit limits, providing additional flexibility for larger purchases.
  10. Financial Discipline: Using a credit card responsibly encourages budgeting and spending discipline, especially if you commit to paying off the balance each month.

Overall, when used wisely, credit cards can enhance financial flexibility and provide various benefits that contribute to better money management.

Is having a credit card good or bad?

A credit card might be the right choice for you, but you have to consider it as a very serious financial decision. Getting a credit card at 18 can help you begin building credit, when used responsibly. However, if you don’t keep up with payments, credit card debt will create a big financial mess.

Having a credit card can be both good and bad, depending on how it’s used. Here’s a breakdown of the pros and cons:

Advantages (Good)

  1. Builds Credit: Responsible use helps establish and improve your credit score, which is essential for future loans and mortgages.
  2. Convenience: Credit cards offer a convenient way to make purchases, especially online or for larger expenses.
  3. Rewards Programs: Many cards provide rewards, cash back, or travel points, allowing you to earn benefits on your everyday spending.
  4. Purchase Protection: Credit cards often include fraud protection, extended warranties, and purchase protection, adding security to your purchases.
  5. Emergency Access: They can serve as a safety net for unexpected expenses, giving you quick access to funds when needed.

Disadvantages (Bad)

  1. Debt Risk: If not managed properly, credit cards can lead to overspending and accumulating debt, which can be difficult to pay off.
  2. High Interest Rates: If you carry a balance, you may incur high interest charges, increasing the overall cost of purchases.
  3. Fees: Some credit cards come with annual fees, late payment fees, and foreign transaction fees, which can add up.
  4. Impact on Credit Score: Mismanagement, such as late payments or high credit utilization, can negatively affect your credit score.
  5. Encourages Impulse Spending: The ease of using a credit card may lead to impulse purchases rather than mindful spending.

Conclusion

Whether having a credit card is good or bad largely depends on how you manage it. Using a credit card responsibly—by paying off the balance in full, avoiding unnecessary debt, and taking advantage of rewards—can lead to many benefits. Conversely, poor management can lead to financial difficulties.

We know that anything in life has its boons and banes, but the question remains, will the benefits outshadow the disadvantages? Should you own a credit card? 

To answer your questions, here are the top reasons why you should get a credit card. 

Safety

Carrying a huge amount of money in your purse or pocket is risky, especially if you’re going to crowded places. Thieves are everywhere, and carrying cash around increases your chances of being robbed. However, if you only carry a small amount of cash plus a credit card, you can make sure that your money is safe. 

A stolen credit card can be easily dealt with, unlike with stolen cash. You can just call your bank and report a missing card, and they will automatically deactivate it. Thieves won’t be able to use it once you have already alerted your bank. 

Convenience

Aside from the risk of carrying loads of cash in your purse, it is also inconvenient. If you carry just your card, you can still shop with ease. When traveling, a credit card can also let you purchase things easily, even in other countries with different currencies.

It will help you save time as you wouldn’t need to go to a bank for currency conversion during your travel abroad. You will just have to pay using your credit card, and you are good to go. Your card is good as cash, even in other countries. 

Cash Anytime

Credit cards are not only used for purchases. You can also withdraw cash using the card via an ATM.  If you don’t have the time to apply for a loan, such as CreditNinja.com’s various loan offers, you can use your credit card and withdraw the amount that you need as long as you do not exceed your card’s credit limit. This transaction is often called a credit card cash advance, where you are borrowing cash against your card’s line of credit.

You will just have to pay a monthly finance charge for the cash withdrawal. The charge you are going to pay will be based on your credit card policy. It is best to check with your credit card issuer to know the interest rate and other charges when performing a cash withdrawal with your credit card. 

A credit card cash advance is one of the best alternatives for a loan because you wouldn’t need to go through a loan application process. You can get your cash anytime you want without providing any requirements and filling out forms. Plus, borrowing money against your credit line won’t affect your credit score.

Rewards And Cash Back Program

Most credit card issuers give cash back programs and rewards to their customers. This gesture is their way of thanking their loyal customers and it also serves as an initiative for them to keep using their credit card.

The more you use your card, the more rewards you can get. To enjoy the rewards offered by the credit card company, you must choose the reward that will fit with your spending habit. 

Easy Tracking Of Your Spendings

To be able to have successful budgeting, you must track all your spendings accurately. One of the benefits of having a credit card is that they help you track your spending through your credit card statements. 

Your statement will act as an expense tracker. All your spendings paid using your card will be recorded along with all the important information such as where, when, what, and how often you are spending. Credit card companies even keep your records for years and you can ask for access when you need it.

When it is time to pay your taxes, this information provided by the credit card statement will be very useful. You can have easy and convenient access to the statement of years of spending, which will help you save time and effort.

Fewer Fees

Credit cards have fewer fees compared to debit cards. The only fees you will be paying will be the interest rate of your credit card purchases and the annual fee imposed by the issuer. Debit cards will require you to pay for overdraft fees, maintenance fees, and foreign ATM fees. However, with your credit card’s rewards system and cashback programs, you can easily even out the said annual fee.

Some credit card companies don’t charge their customers an annual fee; you will just have to be very diligent in searching for this type of credit card issuer. The fees on your credit card will generally be minimum or even zero if you know how to find the best credit card company.

It’s Time To Get A Card

If you don’t have a credit card, then it is time to get one. You never know when you’ll need extra cash or when you’ll need to purchase something important before you get your paycheck. 

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