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What Are The Benefits of Shopping With a Credit Card

in Credit Cards

For many shoppers, credits cards are strictly a last resort. They are either secured away for emergencies or have been completely maxed out and are slowly being paid off each month. The nation has been swept by thrifty fever, and many are being encouraged to spend sensibly in this tough economic climate. However, credit card spending is not always a bad idea, and it has perks and benefits.

Shop For Your Bank

The first important step is to make sure that you have the best credit card for purchases. You’re not obliged to stick with the same bank that you have your main banking account with, and you can go elsewhere for a credit card without having to open another current account. If you have a strong credit history you may find that you can shop around everywhere to find the absolute best rates. If you have a poor credit history, or if you have never owned a credit card before, some banks may reject you or you may be offered a smaller credit limit. However, many banks are upfront about these requirements, and a poor credit history does not mean you are tied to a poor rate.

The Rates To Look Out For

A 0% purchase rate is essential for credit card spending. Otherwise, you will be paying interest on all purchases and the convenience and the benefits of credit card spending will be inapplicable. The length of time the 0% applies is also important as it can range from around 3 months to 18 months. Typically, the longer the better, but for some people a shorter amount of time will be fine.

Why Do You Need A Credit Card?

You must think carefully about why you need to use a credit card for spending in the first place. The absolute worse reason is for impulse purchases. It is a quick and easy way to get in debt that can’t be managed. Instead, credit card spending is best for essential, big purchases that are affordable within your budget when staggered over time. If a new sofa is needed for the homestead, approach the purchase the same way you would a credit plan. You can’t pay the full amount but you will be able to make small monthly payments within your budget. Work out how much it costs per month to pay off the sofa and, if you can do it in the time before your 0% rate expires, then you will have effectively borrowed the credit to pay for it without having to pay any interest.

Don’t be content to make the minimum payment for the credit card each month. By the time the 0% rate expires you will still be left with a hefty sum on your statement that will begin to accrue interest. Set your own minimum payments and have the discipline to stick to them.

Keep An Eye Out For Rewards

Many credit card companies offer incentives for shopping in certain stores or for the purchase of certain products. Airmiles are a long established credit card perk, allowing shoppers to fly cheaply. They accrue over time when purchases have been made with the credit card. As many supermarkets now have their own credit cards for customers, they too have begun to offer their own reward schemes. If you are a loyal customer and do your grocery shopping in the same supermarket every week or month, it pays to use the card in these circumstances as you can build up store points on all purchases. Just make sure you pay it off immediately, as you would if you had used a debit card for the purchases.

It Takes The Right Type Of Person

Discipline and effective planning is vital to credit card spending. 0% purchase rates can be a downfall for many people as they believe they can put their spending to the back of their mind until the rate expires. However, if you know that you have the income to pay off the card in the required time, credit cards can be a great way to borrow interest free or be rewarded on purchases.