From meager beginnings in the 1920s, the credit card market has exploded over the years, thanks in large part to the computerization of society. Credit cards revolutionized consumer spending habits and changed the face of business. In today’s economy, credit cards represent an important part of household, business and global activity.
Personal Credit Benefits
For individuals, credit cards are an important part of everyday life. Whether purchasing gas and groceries or reserving a hotel and rental car for an upcoming vacation, credit cards represent a convenient and secure form of payment for consumers. Benefits ranging from damage protection on purchases to the ease of disputing suspicious charges or fraudulent activity make credit cards an attractive form of payment.
Beyond the ease of use and added security, credit cards can also help you build a solid credit history. With regular use and prompt payment, responsible consumers will find that lenders are more willing to offer them additional credit in the form of increased credit lines, mortgages and consumer loans.
Business Credit Benefits
New businesses and entrepreneurs looking to embark on a new business venture often find capital hard to come by. For small businesses, credit cards represent an important financial lifeline when traditional funding sources, such as small-business loans, aren’t available. Credit cards help businesses financially, and they also have a positive impact on small-business growth.
Effects on Economy
Credit cards are not only important for individuals and businesses; they’re an important aspect of continued economic growth. Cash works best in face-to-face transactions and checks take time to cash. Credit cards and electronic payments, however, make functioning in a global marketplace much easier. This ease encourages long-distance transactions that increase gross domestic product and consumption, both of which lead to job creation.
Credit cards play an important role in the cycle of increased consumption and production by offering merchants a guaranteed method of payment and providing consumers with a way to bridge the gap between paychecks in times of emergency.
Rewards Programs and Other Benefits
Many modern credit cards attempt to entice cardholders by offering additional consumer benefits and rewards. Based on the type of card you have, you may qualify for rewards such as cash back, discounted purchases, trip cancellation insurance and air miles. With a little comparison shopping, you can find a credit card that offers rewards to fit your lifestyle.
Some credit cards allow you to finance new purchases interest-free for several months. Doing so allows you to finance an emergency doctor's visit or car repair without paying interest and finance charges.
Nicole Long is a freelance writer based in Cincinnati, Ohio. With experience in management and customer service, business is a primary focus of her writing. Long also has education and experience in the fields of sports medicine, first aid and coaching. She earned her Bachelor of Arts degree in economics from the University of Cincinnati.