What are the benefits of having a credit card?


Quick Answer

Benefits of having a credit card include the convenience of buying now but paying later, help with building credit, protection of purchases and during life events, the ability to earn rewards, and potentially saving money in the long run, according to Discover. The possession of a credit card also lends to an air of exclusivity, allowing ease for booking a hotel or securing a car rental. Cardholders reap these benefits with responsible use of credit cards.

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Full Answer

Protection perks of possessing a credit card may cover extended warranties, honor price matches, extend return time frames and repair or reimburse for lost, stolen or accidentally damaged merchandise, as Consumer Reports details. Most credit card companies offer built in insurance coverage for car rentals as well.

Credit cardholders save money with on time payments and by using only a fraction of their total credit limit. Positive card activity favors well with credit bureaus, thus increasing creditworthiness and scores to qualify for lower interest rates on other major expenditures such as home mortgages and auto loans, according to Bank of America.

Rewards, earned from purchases or dollars sent, include cash back, flight credit and discounts on gasoline, says Discover. Points accrue for qualified purchases during the time period specified by the card issuer.

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