1.3 Benefits of credit cards

Credit cards, if used properly, can be a very useful tool for your personal finances.

The most obvious advantage to having a credit card is the credit facility you can use. Often credit cards will come with an interest-free period on purchases and/or balances you have transferred from another credit card. This means that your credit facility can sometimes be free for between six and 12 months.

If you are new to the world of credit, or have a poor credit history, then credit cards can help you to build up your credit rating.

By using your credit card regularly, and then paying off your bill in full at the end of the month, you will get a free boost to your credit rating.

Using a credit card to kick start your credit rating can also be very kind to your wallet because some credit card companies will give you cash back or other rewards whenever you use your card.

Other cards will help your favourite charity or football team each time you use it. This can be a great way of making a regular contribution to what you feel is a worthy cause at no extra cost to you.

Businesses also benefit from the use of credit cards because they can be great to give to staff in place of complicated and time-consuming expense forms.

All in all, credit cards can really help your finances, but only if they are used responsibly.

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