Credit cards may sound unlikely for a young apprentice to consider but could it be a way of saving money and being rewarded while spending? Credit cards effectively let you buy things, but you pay for it at the end of month- like a short-term loan. Throughout the time that you use your card you will gain a credit score, be protected on purchases and (depending on which card) gain rewards and cashback for spending money.
What benefits do credit cards have?
Security & Protection
There are many benefits to getting yourself a credit card, on all cards, you will get free protection when you spend over £100 on the card. Any purchases between £100 and £30,000 is protected under Section 75 of the Consumer Credit Act. That means you don’t have to worry if anything goes wrong with the purchase because the credit card company takes the same responsibility as the retailer. That could be anything from faulty electronics to a dodgy holiday, you are guaranteed protection from the credit card company.
Flexibility & Options
Credit cards also allow you to spread the cost of big purchases, sometimes interest-free if you get the right card. If you buy an expensive item, you can pay it back over two years for example, while sometimes not even racking up interest. This means you don’t have to fork out a lot of money at once, therefore aiding your cash flow.
Rewards
Out of the many cards you can choose, there are some called ‘cashback’ or ‘reward cards’ which earn you cashback or give you rewards for spending (the clue’s in the name). Be aware that there is a disclaimer with these cards though, you can only claim the rewards if you pay off your debt in full each month- that will build your credit rating, reward points and cashback balance.
The key is to use these cards for big purchases as well as everyday spending, using them to their full potential.p>
What are the negatives of credit cards?
Many of you reading this blog probably haven’t had a credit card before so you haven’t yet run the risk of getting a poor credit rating. But, if you do have a poor credit rating you won’t get the best deals on cards. There are cards out there that allow you to build up your credit rating if you have a poor credit score. You could get a poor credit score for a number of reasons, the most obvious being; if you haven't paid off your minimum credit limit each month or you have not followed the credit cards terms and conditions.
So, if you're considering getting a credit card, look at your different options and see what is best suited to your spending habits. For more information and to apply for your own credit card, visit it’s the best comparison site out there for determining what best suits you.
