![]() ![]() ![]() Free delivery or even gifts from co-branded partnersĪ credit card welcome bonus is an incentive banks offer to entice new customers to apply for and use credit cards.Membership application reimbursement credits for programs including TSA PreCheck, Global Entry, NEXUS, CLEAR and more.Airline perks including free checked bags.Protection against some types of credit card fraud.Here are just a few of the most basic ones: BenefitsĬredit cards offer all sorts of features and additional benefits to incentivize your application and use of a card. When deciding on a credit card, it’s important to understand the terms and conditions of a rewards program in order to prevent leaving points-or cold, hard cash–on the table. Rewards come in several flavors including cash back, airline miles, points and more. Many credit cards provide you with rewards for using them, but finding the best one(s) for you can be a challenge. Many credit card issuers offer $0 fraud liability protection, which means regardless of the circumstances, you’re not responsible for any unauthorized purchases at all as long as you notify the issuer. If the fraudulent purchase occurs before you report the card stolen, federal law limits your liability to $50. The same goes if someone manages to steal your credit card number but not your physical card. The Fair Credit Billing Act prohibits credit card companies from holding you responsible for unauthorized purchases on your credit card if you report it stolen before the thief uses your card. While many cards market a $0 fraud liability benefit, legal protections also exist. Fraud ProtectionĬredit card fraud protection benefits safeguard you from responsibility for unauthorized purchases made on your account. Many credit cards also allow you to make purchases with just the tap or a hover of the card or even your cell phone. This doesn’t mean you should spend money you don’t have, but it does protect from overdraft in the event your paycheck doesn’t clear immediately. During this time, the amount of the hold on either a credit or debit card is not available to use.īecause you may not have the necessary funds in your bank account, credit cards increase your purchasing power, providing you with the required funds at the time they are needed. This procedure can take several days or longer. ![]() One reason is because some major car rental companies and hotels require a large hold on a credit or debit card to reserve a vehicle or book a room. Credit cards can also be used in person, online or over the phone and are not the same as cash in the sense that when stolen, you have recourse to protect your assets.Ĭredit cards can also be beneficial when traveling. Visa and Mastercard credit cards are accepted nearly everywhere while American Express and Discover are widely accepted throughout the U.S. The bureaus then use this information to create your credit reports, which are the basis of your credit scores. If you do receive approval, you’ll likely receive less-favorable terms.Ĭredit cards help you build credit because credit card issuers typically report your account and activity to the national credit bureaus-Experian, TransUnion and Equifax. If you don’t have much experience with credit or have negative factors weighing you down, such as late payments in your credit history, you may have difficulty receiving approval for a new account. If you have a long history of making on-time payments and managing debt responsibly, you likely have a good credit score and may have a better chance of getting approved for credit with favorable terms. Credit scores are based on how you’ve managed debt in the past, and lenders use your score to establish the level of risk you pose as a borrower. Whether financing a new cell phone or buying a house, credit reports and scores are used by lenders to evaluate your creditworthiness and establish your borrowing terms. For the most part, whether to get a credit card or not boils down to your own ability to use it responsibly.īelow are some of the reasons you might consider a credit card: To Build Credit While having a credit card can allow you to cash in on benefits like rewards points and frequent flyer miles, those perks are quickly nullified if you do not pay your bill on time. Like everything in life, credit cards come with trade-offs.
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