By the third quarter of 2017, there were 362 million open credit card accounts in the United States. That’s a whopping increase of 4.7% from 2016!
Today, the average credit card debt per U.S. household amounts to $8,292 (as of January 2019). That’s definitely a lot, but that also signals an improving economy. Consumers are more confident about their finances, and they’re also becoming savvier buyers.
Besides, the benefits of a credit card extend to more than its “buy-now-pay-later” feature. That’s the biggest attraction, but there are also other pros to owning one you likely haven’t heard of.
Ready to learn all these juicy details about credit cards a lot of folks aren’t aware of? Then let’s dive right into it!
1. It allows you to start building credit
Never took out any kind of loan, not even a student loan? If so, then you’re likely one of the 45 million Americans without a credit score. While this doesn’t sound as bad as having a bad score, it actually is.
After all, most mortgage, car, and personal lenders look into a borrowers’ credit score. If you don’t have this three-digit score, you may not qualify for a personal cash loan in case of emergencies! In fact, you’ll have a hard time qualifying for almost any type of loan.
This is where one of the advantages of a credit card comes into play. Make regular expenses and payments with your card, and you can start building credit. Your card issuer will report
2. FICO score report
Speaking of credit scores, there are now some credit cards that give you free FICO reports! You’ll see your FICO score on your monthly statement, making it easier to track your credit score.
With this, you can enjoy the benefits of good credit standing, like lower loan interest rates. You may even score lower insurance deals with a better credit score.
3. A Savings and credit card account in one
A secured credit card allows you to make the most out of your savings account without depleting it. In most cases, the card issuer will ask you to open a time deposit account for a certain period of time. You can’t touch the money in it, but it’ll earn interest over that period.
You can use this account as the “security” or collateral for a secured credit card. So long as you make your payments on time, your savings will remain untouched. Once the time restriction is up, you can withdraw your money (plus interest) and still have a credit card!
4. Fly in style
Free flights aren’t the only benefits of credit cards — some even give you access to VIP airport lounges! You can get free food, drinks, and WiFi, while you sit on a luxurious couch.
5. Rental car coverage
Most credit card issuers also offer rental car coverage at no extra fee. Meaning, you can save hundreds by opting out of the coverage offered by car rental companies. You only need to use the credit card that comes with this perk to pay for the rest of the car rental costs.
6. Price protection
Let’s say you bought a new pair of kicks worth $300 a couple of days ago. Then, you pass by the same shoe store today to find the same product on a 70% discounted price.
If you used a card with a “price protection” feature, you may get a reimbursement for the price difference.
Pro Tip: The exact benefits of credit cards vary from issuer to issuer, so it’s best to compare your options. List down what’s most important to you, be it free miles or higher price protection. For faster comparison, you may want to use a credit card comparison tool, such as EnjoyCompare.
Sign up now to enjoy these benefits of a credit card
Free luggage protection and extended warranties are other benefits of a credit card. Some issuers even offer coverage for delayed trips and free concert tickets!
As you can see, there’s plenty more to a credit card than just letting you “buy now and pay later”. All these should be enough reason for you to get one ASAP.
One last thing before you go: Learn how to manage and pay off your credit card debt using our ultimate guide!