Credit cards come with plenty of negative aspects, and their misuse has led to the financial ruination of many unsuspecting souls. However, credit cards don't have to be that mean old troll living under the bridge. On the contrary, effective credit card use can offer a number of important benefits you can enjoy throughout your life.
Obtaining credit often poses a "Catch-22" dilemma in which you can't get something unless you already have it. For many people, a credit card is their first opportunity to obtain access to credit and build a solid credit history. Responsible management of that first credit card can open the door to more significant types of credit vehicles such as mortgage and auto loans. Paying your monthly statement on time and keeping your outstanding balances low can raise your credit score, meaning you can get future credit at lower interest rates.
Making Life More Convenient
The convenience that credit cards offer can make your life a little bit easier. You don't have to carry wads of cash with you wherever you go, and you can buy goods and services online instead of fighting the crowds at shopping malls and stores. If you travel frequently for business or pleasure, credit cards are a virtual necessity for making plane or hotel reservations, renting vehicles and managing your expenses while you're on the road. Some cards also feature rewards programs that can make your travel less expensive over time.
Making Large Purchases Possible Sooner
It's not always possible to have the money you need exactly when you need it. For instance, if you just purchased your first home, you might not have the additional cash on hand to buy necessary items like furniture and appliances. You can use your credit cards to acquire these items and pay for them over time, preventing the need to sit on milk crates and wash your clothes with a rock down by the river.
Sense of Power
Credit cards can provide a sense of power that leads to enhanced self-esteem, particularly in younger people. According to Bankrate.com, an Ohio State University study indicated that young adults ages 18 to 27 felt that having credit card debt gave them greater control over their lives. However, the study also shows that this sense of power can decrease by age 28, particularly if young people overestimated their ability to repay their debt due to not finding employment that meets their income expectations.
Chris Joseph writes for websites and online publications, covering business and technology. He holds a Bachelor of Science in marketing from York College of Pennsylvania.