Student Credit Card and Credit Education Blog

Yahoo! Finance had a great article with reasons why you should have a credit card. Some are obvious and I’ve mentioned before, but there are a few that I haven’t brought up and are excellent and not quite as obvious.

1. Improve (establish) your credit history and score

Definitely - I covered this.

2. Internet Purchases

It’s tough to buy online without a credit card. There are options such as Paypal and Google Checkout, but you generally need a credit card as a “backup funding source” for these payment options. So, if you want to be a regular at Amazon, get some plastic.

3. Emergency Money

Sure, your high interest rate may hurt in the long run, but this is an EMERGENCY and you need the money NOW. If this is your situation, don’t be afraid to charge away.

4. Rewards

Another one I discussed - something to look for.

5. History of Purchases

This is a great benefit. In order to determine where your last few paychecks went, you can use your older statements to help figure this out. These statements can also help you budget for the future.

6. No Fear of Loss or Theft

Another good one. If your wallet is stolen and cash is removed, you have no recourse. It’s sad, but true. However, if someone nabs your credit card, you simply call up the company who sends you the bill, and let them know what happened. Even if the thief bought a year’s worth of suits at Barneys, you usually won’t be on the hook for anything more than $50.

7. Interest-Free Money

Yep, we’ve discussed.

8. Merchant Protection

This works similarly to if your card is stolen. Let’s say you buy a laptop from an online retailer. You wait and wait and wait. You never receive your laptop or even any communication from the retailer. In fact, when you contact the company they appear to be out of business. The protection provided by credit cards will guard you from illicit merchants.

9. Insurance on Purchases

This is a nice bonus for goods and services, if your card supports this feature. If an item you purchased using the card breaks or is defective, outside of the manufacturer’s warranty, your card may replace it for you. Just be sure to check your card’s list of benefits to make sure the insurance is applicable.

10. Convenience When Traveling

There are two reasons why this is a good reason to have a credit card:

1) You don’t need to carry foreign currency (or worry about getting rid of it when your trip is over!)

2) The exchange rate is usually better when you use a credit card, because the card’s bank processes a significant amount of foreign transactions so the rate is optimal.