Advantages of Credit Cards: 10+ Fully Explained Benefits With FAQs

Nowadays, credit card has become an indispensable tool for our daily spending. Because, you can spend a money you don't own with a credit card and pay back later with low or no interest.

However, many people are just using credit cards without knowing the advantages, pros or benefits associated with it.

Therefore, today in this post, I would like to give you a detailed explanation of the best advantages of credit cards you suppose to know. Such as; Easy access to loan, discount and cash back opportunities, cardholder/buyer protection, interest free loan opportunities, absence of international transaction fees and many more.

But before I go deep in to this post, I would like to give you a brief credit card definition.

Benefits of using a credit cards with FAQs
Advantages of credit cards

🔍Table of Contents

Credit Cards Definition

A credit card is a plastic/metal card issued by a bank or other financial union to individuals (cardholders), without associating it with any bank account for the purpose of paying for good and service.

However, according to the information I found from Wikipedia, credit cards are of two groups. Which are; consumer credit cards and business credit cards.

Likewise, a typical credit card is supposed to have an issuing bank logo, card number, hologram, contactless chip, expiration date, card number, card security code, magnetic strip and signature. 

Advantages of Credit Cards

Below are some benefits for credit cards you suppose to know.

1. Worldwide acceptance:

Nowadays, credit cards are the most widely accepted payment method without any international barrier. So, as a credit card holder. You can utilize this credit card advantage to pay for hotels, transportation fee, plane tickets are many more in any country.

2. Building credit score:

As someone who is willing to build his credit score for loan application or any other reasons, credit card has a great important to you. Because, credit cards submit all your spending records to credit bureau by default. And this will help to build your credit score.

3. Discount and cashback opportunities:

Most credit cards providers offers different cash back opportunities when ever a credit card holder use their card and pay for products and services. 

Likewise, some lenders offer discount for any purchase or loan repayment done using a credit card. So, you can utilize these pros for credit card to get discounts and increase your savings.

4. Interest-free loan opportunity:

Almost all credit cards come with an interest-free period. During this period, you can borrow money from your credit card to payback later without any interest, provided that you paid within the grace period.
The period within which you can get interest-free loan ranges from 45-50 days. It also depends on factors like your credit score and your credit card provider.

5. Easy access to loan:

As I have stated earlier that credit card is important for building credit score by summiting spending record to credit bureau. So, it also gives you easy access to loan at the same time. Because, 99% of lenders use credit score to decide whether to give you loan or not.

However, managing your credit card properly will prove to lenders that you can be able to manage you loan and credit. Therefore, this will surely help you to get loan easily without any difficulty.

6. Not linked to any bank account:

Credit cards are not linked to any bank account, either current or saving account. So, you can get a credit card without going to any bank or following any Que.

7. Presence of credit line:

Credit line is a spending limit associated with any credit card. Credit line can be $100, $200 or any other amount depending on the cardholders credit history. Without any doubt, credit line helps cardholders to reduce unnecessary spending.

8. Eases travel across the world:

Credit card eases travel across the world due to some of its benefits like discount, cashback, universal acceptance and many more.

By using a credit card as your payment method while traveling, you would benefit from discount and cash backs when booking flights/hotels or buying food from different restaurants worldwide. 

9. Fraud alert:

Some credit cards providers offer an alert when ever someone is trying to make purchase using your credit card. This alert comes in different format. Such as; phone call, SMS or email. Using this alert, you can terminate any unauthorized transaction on your credit card.

10. Fraud liability guarantee:

Some credit cards providers offer fraud liability guarantee for their customers. Therefore, if you hold such type of credit cards, you will not be held responsible for any unauthorized transaction done using your credit card.

To be sincere, this is among the pros for credit card I like most. Because, I am a kind of person who is always afraid of fraud or any fraud related issues.

Likewise, to the best of my knowledge, companies like Discover offer $0 card liability guarantee for their customers. So, you can hurry up and get yours.

11. Cardholder/buyer protection:

At times, you might encounter problems with your card or the product purchase using it. Using credit card, you don't have to worry. Because, credit card has a default buyer protection.

Therefore, when ever you purchase goods using your credit card and find out that the product is damaged, you can claim your money back from the card provider provided that your spending is within the range of £100 to £30,000.

In my own perspective, buyers protection is among the significant advantages of credit cards that make them attractive.

12. Absence of international transaction fees:

As I already stated earlier in this post that credit cards are the most accepted payment method universally. Likewise, one of their unique advantages is that they have zero international transaction fee. So, you can use a credit card to settle payment or withdraw money at any part of the world without paying any fee.

13. Peace of mind:

As a round of point, I would like to add peace of mind among this list of the best advantages of credit cards.

It might sound strange to hear peace of mind among the benefits of credit cards. But by thinking critically, you may find out that credit card offer peace of mind to its holders. Because, you don't have to carry a huge amount of money anytime as a credit card holder. 

Likewise, you may also have fraud alert and or fraud liability guarantee associated with your card. So, you will surely have peace of mind that nobody can access your funds while at home or in a trip.

FAQs About The Advantages of Credit Cards

What are the Advantages of Credit Cards?

Advantages of credit cards are pros or benefits of credit card over its counterpart. E.g. Discount and cashback opportunity, easy access to loan and so on as explained in this article. 

Do the Advantages of Credit Cards Out weight the Disadvantages?

Yes, according to many people's beliefs, the advantages of credit card outweigh the disadvantages. Because, according to statistics found on Transunion, the number of people using credit card is increasing almost every day.

Can I withdraw cash from ATM using my credit card?

Yes, you can withdraw money from any ATM across the glove without any fee.

Do credit card offer interest-free loan?

Yes, its also among the advantages of credit card they offer interest-free loan. As I already explained in this post, credit card is entirely an interest-free loan provided that you top it up within the grace period.

The Final Decision

Advantages of credit cards are pros or benefits of credit card every cardholder is supposed to know. Therefore, I managed to figure out some significant importance of credit card to you. Some of which are; buyers protection, interest free loan, easy access to loan, fraud alert, credit line, fraud liability guarantee, peace of mind and many more.

By the way, knowing this advantages will give you peace of mind while using your credit card. Especially the fraud alert and fraud liability guarantee. So, please share this post with your friends. Because, sharing is caring. 
Tech Propagator

Hello there. I am Ammar Yahaya Abdullahi, a Nigerian digital entrepreneur with years of experience as a blogger.

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