When Should One Use Credit Card?

In today's era, almost every working individual will own a credit card. This plastic money though small fits into the pocket easily and gives the power to the cardholder to buy anything from groceries which accounts for small spends to big spends like furniture. The benefit of using a credit card lies in the fact that the cardholder need not have to pay any interest on the bill if the dues are paid within the billing cycle.

A credit card put in proper usage acts as one of the most powerful financial tools. But most of the cardholders use it irresponsibly and end up in the vicious cycle of debt. When a credit card is put for proper usage, then the cardholder can better pay off with it than with a debit card, thus keeping the cash transactions to a minimum.

Let's understand as to When Should One Use Credit Card?

Bill Payments

Paying bills using a credit card is one of the scenarios wherein, the plastic money can be used. Today, most of the eateries, dining outlets, restaurants do accept payment made through credit cards. Most of the credit cards do offer rewards and cashback on the usage of credit card at dining places.

If any kind of, unexpected cost arises when you dine in plush restaurants, then use your credit card to cover the expenses as your debit card may not have enough funds to cover.

Apart from this, one can even make utility payments like groceries, electricity bills, water bills, mobile recharges, pharmacy bills and so on using the credit card and earn some reward points.

Emergency Situation

An emergency can arise anytime without prior knowledge. During this distressing situation, when you fall short of your funds from savings, it is better to use your credit card as an option in the absence of an emergency fund.

In this scenario, the only risk factor involved is that the cardholder may become too much reliant on the usage of the card whenever an emergency pops up instead of building up an emergency fund.

It is apt to use the plastic money for a rare like an emergency as this will not trap you into debt.

During Holidaying

Planning for a holiday, use the rewards earned from miles to the best of its use while holidaying. Some of the airlines offer pre-booking discounts on the usage of credit cards for booking air tickets. Some of the credit card providers even roll out annual flight vouchers and can be utilized to pay off the flight tickets.

Do not spend on using the credit card throughout your vacation, until and unless you can pay off the bills. Doing so may take you months or even years to repay the bills or else you may even get into a debt trap.

Avoid these kinds of a scenario and plan carefully in advance and pay your holiday expenses using the saved money.

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