A credit card is a convenient financial tool used for making everyday purchases such as groceries, gas, and paying bills. Many people use credit cards irresponsibly, which leads to increasing debts. If you use this plastic card responsibly, you can save thousands of dollars annually in debt repayment. Let us take a look at the benefits of credit cards.

• One-time bonuses
  The majority of credit card companies offer a welcome bonus when you get a new card. Applicants with excellent credit scores can get bonuses worth $200 or more if they spend anywhere between $500 to several thousand dollars in the first few months of opening a new account. Other cards offer a bonus in points or air miles that can be redeemed for gift cards, statement credit, or booking flight tickets.
• Cashback
  The concept of cashback is simple, as you spend money using your credit card, you earn a certain percentage in the form of cashback. Some credit cards offer 2% to 3% cashback on all transactions. If you have a great credit score, you can get up to 6% cashback select purchases as well. You can either transfer the cashback amount into your account or use it towards the payment of your credit card bill. Remember, you will not earn any reward when you use cashback for credit card bill payments.
• Reward points
  Many card companies provide reward points instead of cashback. Cardholders can earn one or more points for every dollar spend. Many reward cards provide additional points for making transactions at a particular store or retailer. These reward points can be redeemed for gift cards, travel, or buying merchandise through the reward portal.

• Flyer miles
  Flying miles are similar to reward points; the only difference is that you can get these points or miles to book flight tickets, airport lounge access, and other travel benefits. You can earn flyer miles by booking your plane tickets using your credit card. This card is beneficial for people who travel a lot.

• Safety
  Paying with your credit card protects you from fraud. If a thief uses your debit card, you lose money from your account instantly. Even if you are not at fault, you won’t get your money back until your bank resolves the matter. On the contrary, when fraudsters use your credit card, you don’t lose any money. You don’t have to make a payment towards that transaction until your bank resolves the issue.

• Grace period
  When you make payments using your debit card, your money is debited from your account instantly. However, when you use a credit card, your money remains in your checking account. This fund act as a saving that can be used for emergencies or making credit card bill payment. Credit card companies provide a 20-30 days grace period, where you can pay your credit card bill without any interest. But, if you fail to make payment in time, the company or bank will charge interest on the total amount.

• Insurance
  Many credit card companies offer various consumer protections that people don’t even realize, such as travel insurance, product warranties, and rental car insurance.

• Universal acceptance
  Certain purchases are difficult to make using your debit card. Rental car companies and hotels want customers to use a credit card for making the payment. This makes it easier for companies to charge the customer if they damage something.

Credit cards are best enjoyed if used responsibly. You can earn reward points, air miles, and cashback, which allow you to save a lot of money in the long run. If you can use this plastic tool efficiently, credit cards can be your best tool to save some money.