Did you know that there can be
benefits to using credit cards over
cash, checks, and debit cards?
Here are 5 benefits to using credit
cards.
Benefit #1 - Free Loan
If you use your credit card for all your monthly expenses and
then pay off the entire balance on your statement each
month, you essentially get a free loan of money for one
month. If you have to pay a service fee or an annual fee,
then
the loan is no longer free
. If you make your payments late or
go over-the-limit leading to credit card penalty charges, then
the loan is not free either. If you must pay an annual fee to
use the credit card, you can figure out the interest rate for your
loan by taking the annual fee/money spent per year.

Benefit #2 - Ability to Earn More Interest in Bank Accounts
If you direct deposit or immediately deposit your paychecks
into a money market, checking account, or savings account
that earns interest, then you will be able to earn more interest
on your daily monthly balance average by using a credit card
to pay all your monthly expenses. Basically, you are building
up your money marker or savings account each week when
your paycheck is deposited and then only having to withdraw
once a month to pay off one credit card. If you paid your
monthly expenses with a debit card, you would average a
lower balance and lower interest earning for the month.

Benefit #3 - Prevent Money Market Withdrawal Fees from
Eating at Your Savings
If you have a money market, you will usually have a
withdrawal limits of 2 to 5 transactions per month before
service fees are incurred, so using a credit card can prevent
fees from being charged to your money market. Money
markets typically have higher interest rates than checking
accounts or saving accounts. Using a credit card will allow
you to avoid service fees on additional withdrawals since
your bill paying will be simplified to one credit card per month
and plus your mortgage payment. Some rentals and
apartments will also accept credit card payments.

Benefit #4 - Easy Way to Track ALL Spending
One of the reasons why people are unable to budget or track
their spending is because they find themselves unable to
account for $20 to $40 or more spent each week. They have
no idea where it was spent and what it was spent on, all they
know is that it no longer resides in their wallet and they might
have lost the purchase receipt too. By using a credit card for
all monthly expenses, this will allow you to conveniently track
your spending in general places and categories. "GAP" is
always clothing spending and a grocery store name usually
means a food purchase. You can track all spending in a
general categories which is definitely better than nothing.

Benefit #5 - Cash Back Bonus or Other Perks
Cash back bonuses can add up fast if you use your credit
card for all your monthly expenses. For instance, if you
monthly expenses are $1000 with a cash back of 5%, then
your bonus will be $50 per month and $600 for the year. This
money can be invested in the stock market and over a
lifetime, it is possible to fund your retirement with it due to the
principles of time-value-money. Other cards offer points for
gift certificates, frequent flyer miles, cash back, or travel
certificates. These cash back or perk opportunities can be
used to buy books, fund vacations, or cover the flights for
vacations depending on the terms of your credit card.
5 Benefits of Using Credit Cards - Credit Advice
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5 Benefits of Using Credit Cards - Credit Tips

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