Credit cards have a bad reputation among millennials. Only a handful of young people get a credit card to manage their finances during the cash crunch. This unwillingness can be attributed to the lack of knowledge about credit cards and their benefits.
Let us first clear the air around the belief that all debts are bad. Without a properly planned debt, you cannot meet your financial requirements, such as paying your medical bills, education loans, etc. Therefore, it is imperative to become financially literate and how you can use a credit card to your benefit.
Here are the top benefits of a credit card that you can avail of as a millennial:
Most credit cards come with an interest-free period, during which you are not required to pay interest on outstanding credit. The interest-free period generally ranges between 45 to 60 days. You can get free credit if you pay off your entire credit card balance on or before the due date.
Attractive rewards and discounts
As a millennial, it is crucial to be cautious of your expenditure and have savings to cater to emergencies. Getting a credit card can help you achieve your goals, as it comes with rewards and bonuses that you can earn on every spend. You can significantly save money every time you make a purchase through your credit card. These rewards are in the form of discounts and cashback that you can redeem for gift vouchers, dinners, electrical goods, or even air tickets.
Hassle-free shopping experience
You no longer have to give up on your dreams just because you did not have enough money. Having a credit card gives you that extra financial support that you need to make a crucial purchase. For example, you want to buy a motorcycle of your choice, but you have about 90% of the total value. In such cases, you can use your credit card to pay the remaining amount without worrying about not having enough cash.
Additional financial support
As a young person who has just started earning money, investing and saving are new concepts for you. It is worth noting that a credit card provides additional financial support in times of crisis. For instance, it allows you to cover the cost of medical emergencies instead of waiting for your insurance money or redeeming your savings.
The benefit of a credit card is that it offers instant access to cash without touching your savings or investments. So, when you cannot rely on your income or savings to meet an immediate financial requirement, a credit card can come for your aid.
Bestows financial responsibility
Another benefit of owning the best credit card is that you can keep track of your finance. Being able to manage your finances brings with it a sense of power and responsibility. You can always see what you have spent money on, and you can easily create a budget based on your affordability. It is worth noting that taking control of your financial expenses enables you to avoid instant temptations and protect yourself against debt traps.
It bestows a stress-free lifestyle
Understandably, you always look for a hassle-free and stress-free lifestyle. You do not wish to carry wads of cash and risk getting robbed or misplacing your money. Therefore, carrying the best credit card is a more practical option than liquid cash. It is accepted worldwide and safer to use than your debit card. The best part about a credit card is that it limits your liability for fraud. For instance, if an authorized transaction takes place from your credit card, you can immediately block your card and get your money back.
Improves credit score
Most millennials cannot secure loans to meet their financial requirements despite having a stable income, due to having a low credit score. Most lenders consider your credit score before approving your application for a loan. Having the best credit card bestows you the opportunity to improve your credit score. To boost your credibility, you must pay your credit card bills on time and in full.
Credit Card: A great way to manage your money
As a millennial, you may find it difficult to manage your money budget with the cash in hand. But, having a credit card makes it easy as you get a credit card statement every month. Your credit card statement contains information about your purchases, balances, etc. You can use your statement to analyse and learn where you are spending. Also, if you have to make monthly payments of a specific amount, you can opt for an auto-debit facility, thereby avoiding missed repayments, late fees, and other penalties.