Contemplating Your First Credit Card In 2015 Here Are Some Tips

For many people a new year equals a new credit card. Other people never give it it a thought, but what are the benefits of having a new credit card? Getting a new credit card is not for everyone, but some people can benefit from a new credit card in 2016. For this article we will focus on why you should get a credit card in 2016 if you are new to credit.

For those who are just starting out with credit, obtaining a credit card is one of the best ways to build up credit. If you are young and think you will never need credit guess again unless you were born rich at some point you will need credit to buy a home, to buy a car among other things. If you use your credit card wisely you will build up good credit, and good credit will lower your interest rates. Even a mere 1% difference in your APR can mean paying thousands less on a mortgage for instance. A good credit score takes time to build so you want to start that journey now not when you actually need a good credit score or you will find yourself out of luck.

If you are responsible and can pay off your credit card every month you can potentially make a profit using your credit card, albeit not a ton but enough to enjoy some perks
. How you might ask? Rewards cards. Rewards cards offer you cash back or points for every purchase you make on your credit card and if you pay off your balance in full every month you avoid interest charges and get to keep the cash back or points that you have earned, which over the course of the year can substantially add up, even to the tune of a free vacation like me and my wife enjoyed last year courtesy of our credit card.

Another reason to get a credit card is rather simple, the perks. For one your credit card company will act on your behalf if you get ripped off. If you have an item that is defective and the store will not refund you the credit card company likely will. The credit card companies make stores comply with certain expectations and if these expectations are not met the credit card company will intercede. Other perks vary by credit card but some credit cards offer perks such as travel perks like trip cancellation insurance, free bag checks at airports, and free car rental insurance. You also get other perks such as extended warranties on products you buy with your credit card, no need to buy expensive extended warranties.

As long as you can manage your credit card by not spending past your means you can easily build up your credit and enjoy all the perks of responsible credit card ownership. You can avoid fees and charges by picking the right credit card offer and by paying off the balance in full very month. One last great benefit of a credit card, they can be used as interest free loans. As long as you pay the bill at the end of the month you can use it during the month when cash is low such as when an unexpected bill hits.