Credit cards; everyone seems to have a different opinion on whether or not you should get one. Stories of extreme debt and money-loss can often come to mind when thinking of a credit card, which can scare people off. The truth is though, that credit cards can actually be extremely helpful when used well.

When used efficiently credit cards can be a powerful tool that can help you in the financial world. It can help you to build your credit score, spread the cost of purchases, and also budget well. I’ve teamed up with cashasap.co.uk, experts in short term loans to teach you how to use a credit card well. Read this guide to help you decide if a credit card is right for you.

How to Use a Credit Card Well

Build Credit History

Having a credit card can help you build your credit history. A good credit history is important to have as it is what helps you to secure loans in the future, including securing a mortgage. Although not needing to borrow any money is great, it does mean that you won’t have any credit history for lenders to decide if you are a reliable borrower. For this reason it is important that you build up a credit history in advance of needing it, so when you need some form of a loan lenders will be able to approve you. 

If you want to use a credit card to improve your rating, you should use it little and often. This means only purchase lower price items often that you will be able to pay off at the end of the month. This is better for your credit rating than using it for big purchases you will not be able to pay off for a few months. Credit reference agencies also recommend keeping below a certain percentage of your credit limit to ensure you have the best impact upon your credit rating.

You should aim to pay back your credit in full each month to avoid interest. To make things easier, you can even set up a direct debit payment that will automatically pay off the full amount every month. It takes time to build up credit history, so the sooner you start the better.

Buy Securely

Using a credit card can help you to protect any important purchases you make. If you buy something online, for example, and it either doesn’t arrive or arrives damaged, then your credit company is also responsible for getting the money back, depending on the price of the purchase. This means that if something goes wrong in your purchase, you can let your credit provider know and they are responsible for getting the money back.

Anything between the price of £20-30,000 bought on your credit card is covered by the law. This means you can charge higher ticket items to your credit card and then paying it back once the item or service is delivered.

There are many in which having a credit card can be extremely beneficial. It is important to remember if you do get one to use it wisely and ensure you don’t end up in any financial strain! It can improve your credit history if used well, but can also harm it if not. Evidently you just have to look at the facts and decide if you think a credit card is right for you.