Credit cards often get a bad rap for putting people into debt, but learning how to use one can have amazing benefits and actually help you get ahead financially. You have to know how to use it properly in order to reap those benefits. That means keeping your utilization low, paying off your card balance every month and paying your bill when it’s due. The following is a list of ways a credit card can help you get ahead financially.
1. Building Your Credit to Buy a House
A credit card, when used responsibly, can help you build your credit so when the time comes to buy a house, you’ll be in good financial shape to do so. Using a credit card responsibly means paying your bill on time every month and paying the balance in full to show lenders you’re not overextending yourself. By getting your credit in order ahead of time, you’ll be more prepared when the time comes to go house hunting. So use your available credit responsibly and you should have no problem seeing a significant improvement in your credit.
2. Helps You Track Your Spending
Credit cards can also help you keep track of your spending by allowing you to see how much you’re spending in each category, such as on gas, groceries, entertainment and more. Keeping track of your spending can help you cut down on things you don’t really need or cut them out altogether. For example, you might realize you’re spending too much on entertainment or fast food, such as streaming services or food delivery services like DoorDash or InstaCart. Check your credit card statement each month to help you determine where you might be able to cut back.
3. It Can Help You Get Over a Slump
Oftentimes, credit card companies offer sign up bonuses, but only for eligible applicants. That’s why it’s important to work on your credit and do what you can to boost your score — so whenever you’re in a bind financially, you can always borrow money to get yourself out of a bad financial situation. Whether you’re using it to pay your healthcare bill, make home repairs or fix your car, a credit card is one way to get a temporary loan when you need it. It can help you get through tough times with ease instead of worrying about how you’ll make ends meet.
4. Earns You Points Toward Travel and Retail
Some credit cards allow you to earn points on everyday purchases to get money back, free flights and more. USAA offers members benefits when they sign up for certain credit card offers. Just some of the perks you can expect with a USAA credit card include:
- Travel and retail benefits
- 3X points on dining out
- 2X points on gas and groceries
- 1X points on all other purchases
- 2,5000 bonus points after your first purchase
Other rewards include 5 percent, 2 percent or unlimited cashback, depending on the card.
Using Credit Cards to Get Ahead Financially
As you can see, getting a credit card can help you improve your credit score. With a good credit score, you’ll be able to make big purchases like a home or a car with ease. That’s why it’s important that you use a credit card to your advantage, and use it responsibly so you can get ahead financially by making sure you get the best rates when the time comes to make big-ticket purchases.
