Credit cards are a great way to get the most out of everyday spending and fund your spending for the future. Here are 6 reasons why you should put a credit card to use.

Carry Convenience with a Credit Card from The State Bank
  • Add money to your line of credit. Use credit to pay down a small amount of your debt before you use cash for purchases. With a credit card, you’ll make good on your debts as soon as you use the money. While you’ll pay more interest than cash-first methods, the average interest rate on a credit card is a much better deal than the rates you might pay on a high-interest debit card or a debit card that charges high fees.

Credit cards allow you to pay your bills in instalments. Payments are typically $15 or less per payment, which can help you stay on top of your debts as you meet the minimum payment. Even if you make less than the minimum payment each month, the credit card company will cover any expenses up to that amount. This is particularly helpful in the early stages of your debt, before you’re fully supporting yourself. You won’t be stuck with a bill that you can’t pay, so you can use credit to pay down your debts before you become dependent on cash.

  • Ask the retailer for cash-back or reward cards. Many shops offer cards with cash back or cash rewards. A shop could ask you to pay a membership fee or get a free game when you spend $25 at that shop. Then when you have your next purchase, you’ll receive a reward or cash back worth $25 or more.

Not only do the retailers want to take your money, they’ll also earn a commission on every transaction, so they’re in it for the long haul. Check out the store’s rewards card and if it has more generous rewards or cash back, check with the merchant before you buy. You could lose money and increase your debt if you choose not to use your rewards card.

  • Check your credit score. You should use your credit score before applying for a credit card, and while you shouldn’t always use a credit score, you may benefit from having a credit score. Your score is a summary of your credit history. Your score gives you an idea of whether you’re likely to be approved for credit, whether you’ll qualify for a loan or how well you’ll do with payments on existing credit cards. While a credit score can’t predict whether you’ll be approved for a loan, it can give you some insight on what your credit score will look like at different points in the future. A credit score in the low 700s may signal you’re a risk for being denied loans. A credit score in the mid 700s may mean that you are in good shape for loan approvals.

  • Score your credit score for free. The Federal Trade Commission (FTC) recently launched the Make Your Score Available free credit score software that provides consumers the chance to know exactly where they stand in terms of their credit score. They provide free access to the report that has been created for the average person. So, while your score may fluctuate from month to month, it’s a good idea to stay current on your credit score by taking advantage of this free service.