A credit card can help you build credit, meet your daily expenses, and make convenient payments. Learning about credit card uses can help you discover how to make the best use of it. In this article, we’ll explore six uses of credit cards every African American should know.
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Purchases
We use credit cards to buy goods and services. According to a report, 81% of shoppers prefer to pay with cards over cash. You can use it to pay for items in a physical retail store. To use it for in-store purchases, you need to swipe, insert, or tap your card at the card reader, and the amount for the items you bought will be deducted.
Besides in-store purchases, you can also use credit cards for online transactions. When making an online transaction, you enter your card number, expiration date, and CVV into the website’s payment gateway, and the transaction takes place electronically.
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Building Credit
Each time you use a credit card, the issuer sends your payment activity to credit bureaus. Making payments on time adds positively to your credit history. And it shows lenders that you can manage debts properly and responsibly.
On the other hand, using a debit card doesn’t appear on your credit report. This means that it can’t help you improve or build your credit.
You can deposit some funds to get a secured credit card that can help you build your credit history and qualify you for unsecured cards. Check these guides on Amazon to learn how to build credit using credit credit.
Earn Rewards and Perks
Credit cards are set up to allow holders to earn one or two dollars for every dollar spent. Most reward credit cards offer bonus points for certain spending categories, such as gasoline, groceries, or restaurants.
When cardholders reach a specific threshold, they can redeem points for travel and gift cards. The good news is that credit card reward options are endless.
Get a co-branded card that’s offered in partnership with a clothing retailer, hotel chain, or even a nonprofit organization, such as AARP, to take advantage of your daily spending to earn valuable rewards. You can get this rewards tracker on Amazon to organize and maximize your points.
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Cashback
Discover was the first to make a Cashback credit card in the United States. The idea was to use the credit and receive 1% of spending rebated in the form of cashback. Today, the idea has grown and matured.
Currently, some credit cards offer as high as 2%, 3% or even 6% cashback on selected purchases. However, most high credit card cashback offers require yearly or quarterly spending caps.
The best cashback cards are those that charge low interest and fees while offering high rewards. Cards like the Fidelity Rewards card give a 2% rate of cash back rewards on all spending. However, you’re required to deposit your funds directly into a Fidelity investment account.
Auto-Payments
Automating bills means scheduling recurring payments that automatically withdraw the same amount from your bank account on the same day every week or month. Auto-payments can help you avoid the negative side effects of forgetting to pay on time.
You can set up autopay over the phone with a card issuer, via issuers’ mobile apps or online in your account. When you successfully set up autopay, you authorize the card issuer to debit payment from your bank account on a set date each month.
Expense Tracking
Tracking your expenses gives a clearer picture of your financial situation. And your credit card statement is a great way to track your spending. The reason is that it gives you itemized details of your spending. You can get this credit card use tracker on Amazon. The tracker helps to keep track of your spending and payments easily.
For good reasons, financial experts spend a lot of energy to stop us from using credit cards. Many people use credit cards carelessly and end up a huge debt. But if you can learn the various credit card uses you’ll be able to use it responsibly.
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