3 Things That I prefer To use Credit Cards For

I did not grow up in a household where we used credit cards, I saw my Mom pay bills in mostly cash, she would withdraw money from her bank account and proceed to pay for everything with cash because 1) I grew up in the 80’s and 90’s in Nairobi and that is what everyone did and 2) I don’t remember anybody having debit or credit cards then, they did not exist.

Needless to say I had no education at all on the use of credit cards, their advantages and disadvantages and what to look out for. I got my first credit card in college, and quickly got myself in trouble, I charged on it and maxed it out and barely paid on it and I am embarrassed to say, stopped paying on it, needless to say, my debt got reported on my credit and I did not fully understand the consequences of that decision until years later when attempting to get a loan that I really needed and got denied because, my credit showed I defaulted on my debts.

After that whole debacle, I swore off credit cards and for a long time managed to avoid them, by using bank debit cards. However I realized that credit cards are not the enemy, irresponsible use of credit cards is the enemy and credit cards do actually offer advantages over debit cards in some cases. There are actually 3 occasions I prefer to use my credit card over my debit card. Those occasions are;

When travelling

I like to use my credit card when travelling for all purchases, that means that I can keep my savings in the bank as a backup in the case of an emergency, imagine this scenario; you are travelling far from home, you lose your credit card but you need cash, if you have your savings safe in the bank then that cash is easily accessible. Alternatively, if you do not have a credit card and use your savings instead, then if you have an emergency while low in cash then you have way less options available, and therefore more stress or sometimes may result in borrowing money from family and friends and the embarrassment associated with that.

For the Points

I like to use my credit card for the points or cash back. With some cards on the market when you make purchases, you actually get to earn some cash points which you can use for whatever you want, I have some seen real creative credit card hacking on the internet, but since I am not an expert, I will tell you my experience. These cards, offer cash back and travel points and rewards. If you use standard chartered gold card on fuel purchases you can get up to 5% cash back which you can then use for anything you want, I have use used my cashback to pay my credit card bill, or get fuel or even small treats for myself and family. With the travel miles cards, some careful spending can actually get you some free extraordinary trips that you wouldn’t otherwise earn using a debit card,cash or cheques.

For the added protection

Most cards come with additional insurance, for example for car rentals, some credit cards offer car insurance as part of the benefits, which can save you a bundle, as most car rentals require you to use their insurance which can be quite pricey. Also some cards have baggage claim insurance, so imagine this scenario, you travel and when you arrive at your destination you find out your luggage is lost, what to do? Well if you have baggage claim insurance on your card, and used your card to purchase your ticket, it's as easy as filling out a claim.

Credit cards are a necessary convenience in maintaining good credit and also have some great advantages if you are disciplined and responsible in managing your card.

#BerniceNjoroge