The Importance of Credit Cards

From meager beginnings in the 1920s, the credit card market has exploded over the years,
thanks in large part to the computerization of society. Credit cards revolutionized consumer
spending habits and changed the face of business. In today’s economy, credit cards represent
an important part of household, business and global activity.

#1- Personal Credit Benefits

For individuals, credit cards are an important part of everyday life. Whether purchasing gas and
groceries or reserving a hotel and rental car for an upcoming vacation, credit cards represent
a convenient and secure form of payment for consumers. Benefits ranging from damage
protection on purchases to the ease of disputing suspicious charges or fraudulent activity make
credit cards an attractive form of payment.

Beyond the ease of use and added security, credit cards can also help you build a solid credit
history. With regular use and prompt payment, responsible consumers will find that lenders are
more willing to offer them additional credit in the form of increased credit lines, mortgages and
consumer loans.

#2- Business Credit Benefits

New businesses and entrepreneurs looking to embark on a new business venture often find
capital hard to come by. For small businesses, credit cards represent an important financial
lifeline when traditional funding sources, such as small-business loans, aren’t available.
Credit cards help businesses financially, and they also have a positive impact on small-business
growth.

#3- Effects on Economy

Credit cards are not only important for individuals and businesses; they’re an important aspect
of continued economic growth. Cash works best in face-to-face transactions and checks take
time to cash. Credit cards and electronic payments, however, make functioning in a global
marketplace much easier. This ease encourages long-distance transactions that increase gross
domestic product and consumption, both of which lead to job creation.
Credit cards play an important role in the cycle of increased consumption and production by
offering merchants a guaranteed method of payment and providing consumers with a way to
bridge the gap between paychecks in times of emergency.

Rewards Programs and Other Benefits

Many modern credit cards attempt to entice cardholders by offering additional consumer

#4-benefits and rewards.

Based on the type of card you have, you may qualify for rewards such as cash back,
discounted purchases, trip cancellation insurance and air miles. With a little comparison
shopping, you can find a credit card that offers rewards to fit your lifestyle.

Some credit cards allow you to finance new purchases interest-free for several months.
Doing so allows you to finance an emergency doctor's visit or car repair without paying interest
and finance charges.

#5- Insurance
Most credit cards automatically come with a plethora of consumer protections that people don't
even realize they have, such as rental car insurance, travel insurance, and product warranties
that may exceed the manufacturer's warranty.

#6- Universal Acceptance

Certain purchases are difficult to make with a debit card. When you want to rent a car or stay in
a hotel room, you'll almost certainly have an easier time if you have a credit card. Rental car
companies and hotels want customers to pay with credit cards because it makes it easier to
charge customers for any damage they cause to a room or a car.

So if you want to pay for one of these items with a debit card, the company may insist on putting
a hold of several hundred dollars on your account. Also, when you're traveling in a foreign
country, merchants won't always accept your debit card – even when it has a major bank logo
on it.

#7-. Building Credit

If you have no credit or are trying to improve your credit score, using a credit card responsibly
will help because credit card companies will report your payment activity to the credit bureaus.
Debit card use doesn't appear anywhere on your credit report, however, so it can't help you
build or improve your credit.