Most people get a credit card to help them cover the costs of their everyday purchases, whilst building their credit score in the process. However, there can be many more perks to using your card regularly, depending on your individual agreement. Want to make the most of your credit card benefits? Here are our top tips.
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Building a credit history
If you use your credit card responsibly and make each monthly payment on time, you’re likely to see your credit score steadily increase. Future lenders will be able to view your credit history and see that you’ve been able to manage borrowed money to make purchases whilst staying within your credit limit.
A good credit history and score are crucial if you want access to other borrowing options, such as a loan, mortgage or other credit accounts. Using credit irresponsibly can not only land you in debt, but it can damage your credit score too – so you’ll want to make sure you’re able to meet the terms of your credit agreement to get the most out of your account.
Cashback and rewards
Some credit companies offer cashback and rewards on the purchases you make. This can make regular use of your card beneficial, so long as the rewards don’t tempt you to spend beyond your means.
Reward offers differ between credit accounts, so make sure you know exactly what you’re signing up for. Common reward programs include air travel miles, insurance benefits, retail discounts and introductory interest rate offers.
Purchase protection
Most lenders offer purchase protection, although policies might differ between different credit companies. Having purchase protection essentially means that your credit issuer has agreed to give you your money back if something goes wrong with a purchase you’ve made on your credit card. For example, if an item you’ve paid for with your card doesn’t arrive, is faulty, or doesn’t match the product description.
Debit cards won’t usually come with purchase protection, and if they do, there will likely be a limit to what they’ll cover. So, if you want to benefit from purchase protection, it’s best to put large purchases in particular on your credit card.
Borrow responsibly and reap the benefits
When you know that your purchases are protected, or that you may get cashback or be rewarded for shopping, it can become much more tempting to splurge on your credit card. However, making too many impulse purchases will only work against you if you’re not able to stay within your limit or find that you can’t keep up with your monthly payments – this will only make it harder to access credit in the future.
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Ultimately, the rewards that come with your credit card are only worth it if you’re maintaining a good credit rating. Make the most of your card by borrowing responsibly whilst also reaping the benefits available to you.