Much has been said about the harm caused by credit card use. Some financial experts even recommend destroying all credit cards. , especially for those who cannot curb their consumption impulses. In addition, there are still costs related to annuity or monthly payment, and the high interest rates of its financing.
However, for people who have a healthy consumer relationship, who can differentiate their needs as well as their desires and resist the temptations to shop around, credit cards can be a great ally in their planning. financial and often low cost. Just use it correctly and take advantage of the benefits built into the contract.
The main advantage credit card offers is that it can concentrate the payment of various expenses on a single date of your choice. In addition, several cards offer advantages such as:
Travel assistance and insurance
Your credit card often offers these services for free. In some cases, it is necessary to purchase the airfare on the credit card in order to enjoy the benefits at no additional cost. Benefits include medical and dental insurance, personal accident insurance, car rental insurance, legal assistance and assistance with lost luggage, among others. And hiring travel insurance can cost more than the card’s own annuity.
Accumulation of points that can be redeemed for rewards
Accumulation of points that can be redeemed for rewards such as products, services and airline miles (which can then be redeemed for airline tickets) – a good example of what this advantage offers is the purchase of airline tickets on a credit card. In addition to the air miles you earn with your purchase ticket, the points your purchase generates on your credit card help you earn even more miles, making it even easier to get free air tickets on future trips.
Depending on your spending history and your relationship with the card-issuing bank (freely translating: how much you generate revenue for the bank), you may still get discounts or even full exemption from the annuity / monthly fee. Thus, it is very worthwhile to study the advantages that each credit card offers and also its costs to acquire one that offers you the best cost x benefit ratio. And try to have only one card, two if you travel a lot (as they can be very useful in emergency situations). Having multiple cards makes you lose the advantage of the financial planning the card offers, as well as increasing your annuity spending and refocusing on one card, making it difficult to earn points and earn rewards and discounts.
What if I spend too much on the card and can’t pay the next bill?
Well, for those who got too excited about shopping and careless about finances, the last thing to do is to stop paying the bill. The penultimate thing is to pay only the minimum amount. Since credit card interest rates are quite high, the best thing to do is to take out a lower interest loan such as payroll deductible loans and fully pay off the bill. And, of course, “fasten your seat belts” are just not to “pop” the bills again and contain your consumption impulses that left you in this situation…