Why do you need a credit card?

When it comes to financial health, whether you need a credit card or not is a common question that comes to mind. Credit cards, when used appropriately, can be crucial tools for earning rewards, travelling, dealing with emergencies or unexpected bills, and enhancing credit scores. While having a credit card can be useful in some situations, you should carefully consider whether you need one before signing up.

Here are a few of the reasons why you require a credit card:

 

Seek out a sign-up bonus

If you are planning to get a new card, look for one that offers a sign-up bonus like cashback, free hotel stays, points redeemable for airline tickets, etc. Most credit cards now provide rewards for spending—a specific percentage of cash back or miles that can be used toward future trips.

 

Earn cashback

A cashback credit card is a good option if you pay off your credit card balance every month and have no intention of incurring debt. These cards reward you for your good spending habits by giving you a percentage of your spending back in cash. However, because these cards usually have high-interest rates, they are only worthwhile to use if you intend to pay off your balance each month before interest charges kick in.

 

Building credit

Credit cards are a valuable tool for credit building since they allow you to demonstrate how well you handle credit. Credit cards can help you create a great credit history if you make timely payments and avoid exceeding your credit limit, making it easier for you to obtain loans in the future.

 

Safer to carry and use

Carrying cash or using a debit card may not give as much protection from fraudulent activities as using a credit card. Card issuers may also provide various sorts of fraud protection to cardholders, like dark web monitoring for your personal details, contactless payments, and virtual credit card numbers for online purchases, all of which may help make your card and identity safer.

 

Utilize the discount mall

Many credit card companies have a "discount mall," or a group of national retailers with whom they collaborate to provide cardholders with regular discounts. You can usually find a list of these stores, as well as how much you can save, on the website of your credit card company.

 

Earn free airline tickets or hotel stays

Travel rewards credit cards allow you to accumulate miles or points that can be redeemed for a free flight or hotel stay. When you pay with an eligible travel credit card, you can also get travel insurance for trip delays, cancellations, lost luggage reimbursement, and other benefits. This is a great way to save money when booking vacations.

In short, acquiring a credit card can be a great way to build credit and finance purchases, but it can also harm your credit score and lead to debt, depending on your circumstances. At BanqMart, you can find the perfect credit card in Dubai that's ideal for your needs.