August 3, 2018


Credit cards can be a tricky thing – many people use and abuse them, while others have a healthy relationship with credit cards, incurring points for money they would spend anyway. There are a few reasons why a credit card might be worth keeping around, but none of the following applies if you have any issues with overspending, failing to make frequent payments on your credit card or you’ve been in severe debt before. These tips are for people who have a healthy relationship with their credit card and avoid paying substantial amounts of interest.

1. Your Credit Rating

Having a credit card, using it and paying it off frequently can be a great way to improve your credit rating. It shows that you’re capable of healthily managing debt and is one of the best ways to build up a credit score. Like I mentioned above, it’s not worth risking your financial security in order to improve your credit rating. Likewise, if you don’t make regular payments and keep your credit card balance in a manageable range, it can actually harm your credit rating.

2. An Emergency Backup

I suggest that everyone tries to save an emergency fund of at least a few months life expenses so that if you lose your job, find yourself suffering from an illness or need to take time off work for any reason, then you have some funds to help you find your feet. However, sometimes we’re in the process of building up an emergency fund, or unable to do so immediately, which is when a credit card can be helpful for an emergency. Say for example you take your car to be serviced, and find out the brakes are shot and you need to spend a few $100 to be able to use your car to get to work, then that could be a situation where having a credit card is a lifesaver.

3. For Overseas Travel

I personally prefer to use my credit card overseas instead of my Debit Card because my bank has a system where if any fraudulent transactions are made, they will refund them. I feel like I have a bit of extra security and peace of mind I simply cannot have while using my normal Debit Card. Obviously, this policy will vary from bank to bank, but it may prove true for your bank too. Likewise, in my experience, I’ve found that my credit card works in more countries and places that my Debit Card does, which is super handy when you’re traveling to new places. My credit card also offers complimentary travel insurance for any trips booked through my credit card, which is a great bonus that I really enjoy!

Having a credit card can be a great thing so long as you keep your finances in check and ensure that you don’t overspend.