In order to get a good credit score, you need to be using credit, but many can be wary when using credit cards, all too aware of the potential problems that they can cause further down the line. However, with some savvy shopping and a good understanding of how to build up your credit rating without ranking up a debt too, you can start to reap the rewards that many credit card companies will offer.
Whether you’re looking to apply for a new chase sapphire visa card, or you want to start using your existing card more, below you’ll find some top items to purchase that can help you to build your credit.
Purchasing Goods Online
When buying online, you are presented with a number of risks when it comes to your data and who can see it, and credit cards offer protection against this. It doesn’t matter if you’re a repeat online customer or you just want to use your card for a one-off payment, your credit card issuer will probably offer you some form of identity theft or fraud protection should you find that your personal information is stolen.
Depending what card you use will depend on what safety measures are in place, but these will generally be better than what you would be offered by your debit card provider. Paying with credit also protects you from anyone getting access to your personal bank account.
Booking Your Vacation
When traveling, booking all aspects of your trip by using your credit card will provide you with a multitude of benefits. A lot of credit card issuers will provide you with the added security of things such as rental car insurance, medical assistance, emergency services, trip cancellations and travel insurances, without any additional charges.
Booking travel arrangements may also provide you with certain rewards as a number of companies provide benefits to their customers when they use their cards to book their vacation. These include cash back, VIP program access, free upgrades, discounts on vacation and car rental packages, and even the possibility to earn freebies, like hotel stays and flights.
You may even find that you’re offered discounts on certain events while you’re away or that you get an added perk at your hotel. Therefore, if you’re frequently traveling, it’s worth shopping around for a credit card that will offer you some of these cost-saving benefits.
Paying the Bills
If you are good at paying bills and you like to be in control of your payments, paying off all of your bills through your credit card could be a way to build up your credit while also managing your finances with ease. Paying all of your bills through this one source will mean you only have one payment to make each month; and, if you get rewarded with certain payments, you may end up getting money back with all of these regular payments.
Paying your cellphone bill through your credit card company may also protect you if you lose your cellphone or it gets damaged. There may be some restrictions in place here and you will have to be up-to-date with your payments, but it will provide you with added security for your cellphone and removes the need for additional insurance payments that you may be making separately.
Understanding Your Credit Card
If you can look at your credit card as a convenient source of making payments and earning rewards, without thinking of it as a necessity to get by each month, you can enjoy the perks they offer. If you haven’t got the cash to pay for the purchases you’re making on your credit card, then don’t use it. This may only lead to hefty interest rate payments that could affect your financial situation and may lead to further problems.
Equally, just like with your debit card, you need to be careful when making payments using your credit card. Never use it if you’re concerned about the security of the card – this includes any payments that involve a shop assistant taking your card somewhere you can’t see it.
Finally, when you’re looking to get a new credit card, always read the small print to see what’s involved in the contract you’re taking out with this credit card company. Shopping around will help to make sure you’re getting the best possible rates and that you’ll be able to capture rewards that suit your lifestyle, whether you’re a frequent online shopper or a regular traveler.
About the Author: Harriet Haynes writes on a variety of personal finance topics for various websites and blogs. She has a financial background though is now on a career break to raise her first child.