In Defense of Plastic: Why Credit Cards can be a Good Thing

Recently, there’s been a lot of talk about the negative results of using a credit card and how living without one could be the way to go. While this can certainly be true for some, claiming that credit cards are bad for everyone is a generalization that fails to take into consideration all the good things cards can do for some financial situations. Granted, being financially responsible and paying off your balance each month is vital to having success with credit cards. But, there are lots of ways a credit card can actually help your money management:

1) Building Credit. Many people automatically associate credit cards with towering debt balances and wrecked FICO numbers, but that doesn’t have to be the case. In fact, credit cards can be a great way to build your credit score. Having a credit card in good standing and proving that you can handle the credit given to you by a financial organization helps raise your beacon score and gives you the ability later on to finance a car or mortgage. (Check out this article from Quizzle on how to build credit with a credit card.)

2) Travel Arrangements. Did you know that some rental car facilities will not rent to you unless you have a credit card? Some will allow you to utilize a debit card, but they often hold a substantial amount of money until the car is returned. Having no credit card can also make reserving a hotel room or booking airplane tickets tricky. Plus, using a credit card gives you extra security if you’re making these reservations online.

3) Emergencies.  Having an emergency fund is always a good idea and provides you with some buffer if you ever needed last minute plane tickets or emergency car repair. However, some expenses can be more than you planned for and having a back-up can’t hurt. Obviously, emergencies should expenses that otherwise can’t be lived without, so a last-minute television purchase doesn’t really qualify.

Obviously, if you’re trying to get out of debt or are struggling with your current expenses, a credit card might not be the way to go. Everyone’s financial situation is different, and if you couldn’t afford something without the card, then maybe you shouldn’t use it. However, credit cards can and should be used for good! (Need more reasons to use a credit card? Here are ten good reasons from Investopedia.)

How do you feel about credit cards? Are they a good asset or should they be avoided? Let us know in the comments below!

 

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