Plastic money has changed the way we manage our expenses. With a credit card in the pocket, we can shop now and pay later. This easy line of credit has made it possible to afford things that are otherwise beyond our means. However, it is also easy to go overboard and lose track of how much we are spending. This is the reason why most experts warn against using credit cards.

Despite this caveat, credit cards can give a host of benefits when used responsibly. Let’s look at some of these advantages.

Good Credit Rating

If you are planning to take a loan in the future, credit cards can give you a good credit score. The key is to pay your credit card bills regularly and on time. Lenders prefer to look at the credit history before extending credit. A dissatisfactory score can result in rejection of the loan applications. On the other hand, a good credit score can get cheaper rates of interest. An important thing to keep in mind is to not have more than two or three credit cards so that it is easier to track the payment schedules.

Sign-up Bonuses

Several credit cards offer introductory bonuses on a spending limit. To reach this limit, we can purchase expensive electronics items like a refrigerator or an air conditioner. We can even plan your overseas vacation and qualify for this bonus. It is advisable to shop around to opt for a credit card with the lowest annual fees.

Reward Programs

Are you a frequent flier? Or do you spend heavily on dining, groceries or gas? There are credit cards that give rewards when you spend on these special categories. If you fly often, you can collect flier miles every time you travel on a flight. These miles can be redeemed in your future bookings. There are good chances of earning a free trip simply by collecting these miles.

Cashback Programs

Imagine making money simply by spending money! You can earn cashback at various stores and e-commerce sites by swiping your credit card at the payment stage. The best thing is that they are automatic and you don’t have to keep a track on these cashback rewards.

An Extended Warranty

A credit card allows you to enjoy extended warranties on your electronic items. At times, you can get as much as two years of extra warranty. This can save you hundreds of dollars on maintenance and repairs. Keep the receipts safely to avoid any problems in getting them serviced.

Safe travelling

If you have been there, you would know the hassles of carrying bundles of cash when travelling. You are constantly worried about keeping it safe. After all, once stolen there is no way of getting your money back. However, credit cards are much more convenient in comparison. Even if it gets stolen, you can get it blocked and apply for another one.

Tracking your expenses

Credit cards statements are useful if you want to track your expenses and cut down on unnecessary spending. If ever you plan to prepare a budget, you need to know where is your money going. It is not possible to keep a manual record of all your receipts. Secondly, it is easier to monitor your tax deductions if you use credit cards to pay. For instance, you can make donations to charitable institutions with your credit cards and refer the statements during tax returns.

Handling Emergencies

Have you ever imagined a situation if you were in an emergency and needed some extra cash? With credit cards in your wallets, you can easily handle any grim situation like a medical emergency in the family. You can enjoy your financial independence in all circumstances.

Guaranteed Insurance

Credit cards can offer you insurance on car rentals and travel benefits. Damages to rented cars can land you in a soup and may cost you hundreds of dollars. Several credit cards offer the benefit of rental car insurance. However, you may want to read all the clauses carefully before you sign up for a credit card. Similarly, various credit cards offer travel benefits like insurance against loss of luggage and no baggage fees.