There are certain exceptions to the rule when it comes to credit card debt, but using credit cards is still acceptable. If you use them, you may develop your credit profile and get incentives.
Avoiding spending more than you have, and not carrying a balance month-to-month, which results in interest costs the next month. By paying the bill in full every month, you’ll not only save on interest but also prevent overspending and getting into debt.
Build Credit Score
You’ll need a credit score if you intend to borrow money. It’s based on records of your financial behavior. The history of your credit cards plays a factor in determining your credit score.
Card use is reported to the credit bureaus, unlike debit card use. Your credit score is greatly boosted if you have a history of paying your credit card bill on time. In addition, the more time you spend using credit cards, the more credit history you’ll accumulate, which will further improve your credit score.
Things that demonstrate a history of properly utilizing credit, such as on-time payments, holding numerous accounts, not having too much debt, and having access to credit for a lengthy period of time, favorably impact your credit score. In contrast, things like skipping a payment or being late, or not having a lot of credit history, hurt your score.
Your credit score is boosted when you use and pay a credit card on a regular basis. With a good credit history, you’re more likely to get approved for large loans, such as auto loans or mortgages, at a low-interest rate. On the other hand, using a debit card has no effect on your credit history. You can apply for business credit card with your business account to protect your credit.
Protection and Convenience
Your bank account is separated from your credit card, which is an extra safety step.
You may use a debit card to withdraw money directly from your checking account. As soon as you make a purchase, money is promptly sent from your account to the merchant, regardless of whether the transaction is handled as a credit or debit. This is similar to a digital check.
A credit card, on the other hand, doesn’t affect your bank account unless you pay your bill. Your card will be locked if someone takes your number and makes fraudulent purchases, and you won’t have to pay them until the crime is investigated. Cash loss and the difficulties that go along with it, such as not being able to pay your rent, are not a concern.
Spending Track and Purchase Protection
Credit cards allow you to seek a charge-back in the event of a disagreement with a merchant. A charge is waived on your statement if you file a dispute with your credit card provider. If your claim proves to be valid, the charge will be removed from your account. When an airline goes out of business and leaves passengers stranded, this is the only way they can get their money back.
The extended warranties offered by credit cards may apply to electronic devices, furnishings, and other goods that you expect to use for a long time, such as computers. Often, the card doubles the manufacturer’s warranty period. Retain all of your receipts.
Mashreq bank provides its customers with the best credit card offers in town. From rewards to traveling offers, you can avail all types of benefits through the wide range of credit cards offered by Mashreq bank.