What Should I Use my Credit Card for?

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Credit cards are an interesting form of a loan because you can choose when to use them and how much you can spend. They can be very convenient but they are also relatively expensive. It is therefore worth thinking hard about the best ways to use it.

Online Purchases

Credit cards are often used by people to make online purchases. This is because they are more secure than other forms of payment. You will not need to give any bank details and the credit card will also have fraud protection on it. You also have insurance so if the item that you are buying does not turn up or is faulty and the seller will not help you, you will be able to get your money back from the credit card issuer instead. Therefore, you can get peace of mind when you use a card in this way.

Cash Withdrawals

You can withdraw cash with a credit card at any cash machine. However, it is worth being aware that this can be very expensive. You will normally get a warning on the cash machine that there will be a charge on the withdrawal. However, you may also find that there will also be interest charged on the withdrawal immediately so you will have to pay high fees for that as well. The costs will vary between cards and it is well worth being aware of how much it is likely to cost you so that you know whether it is worth doing. It is probably something that you should only do in emergencies really, due to the high cost of it.

Spending Abroad

Credit cards can be a secure way to spend money abroad. You will find that most places will accept them and it will mean that you will not need to worry about local currency. However, this can also be a very expensive thing to do. You may have to start paying interest right away on foreign purchases and the exchange rate may not be very favourable either. It can be better to get a prepaid card to use when abroad. These can be used just like a credit card but you put money on them before you go. They will not charge interest and the exchange rate can tend to be pretty reasonable. It can be worth researching your options carefully.

General Purchases

Credit cards are really designed just for making general purchases. They can be very handy because you will be able to buy things and then you will not need to pay for them right away. You can repay just a minimum amount which will cover the interest and a small amount of what you owe and then not pay for your goods until you are ready. Alternatively, you can just wait until you get the statement and pay for them then and not have to pay any interest. It can be much quicker in shops if you use a card rather than cash and as you do not need to pay for the items right away it can mean that you have a bit of a delay without worrying about this. Many people set up their card repayment to take place just after they have been paid and then they will know that they have the money available for them to repay the cards then. However, if you do want to repay the card in full each month, you will need to make sure that you carefully track what you are spending to make sure that you will have enough money available to do this.

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