For many, the benefits of using a credit card are unclear. What perks are offered? Is it safe? How will using a credit card help me? If used responsibly, the benefits of using a credit card can far outweigh other forms of payment. 

What is a Credit Card?

What exactly is a credit card and how does it work? In order to understand the benefits of using a credit card over a debit card, you must first know how one works. Essentially, a credit card is a payment method that allows individuals to borrow a certain amount of money from the card issuer in order to pay a business for its services and goods, where as a debit card requires users to already have the funds in a designated account. It is based on the cardholder’s promise (or credit card agreement) to pay back the card issuer, plus any other agreed charges. Now that you have a basic understanding of what it is, here are a few reasons why you should use a SDCCU credit card for your daily purchases instead of a debit card.
  1. Increased Theft Protection If your wallet is stolen or a company’s information is breached, your personal data may be compromised. Using a credit card will help you greatly if someone uses your information without authorization. This is because they are using the card issuer’s money when it comes to credit vs your own money in the bank which is what your debit card is linked to. It can take several weeks to resolve a fraud issue and you won’t want to be left penniless if this happens to you. SDCCU Visa® credit cards have a zero liability policy which offers 100% protection from unauthorized use of your credit card, leaving you with peace of mind.

  2. Earn Rewards Some credit cards offer rewards when you use them. From cash back to travel points and even exclusive deals on event tickets, gift cards, merchandise and more. There is likely a card that you can reap the right rewards for you. Many also offer a sign on bonus, but be sure to read any fine print before you apply. In addition to extended warranties and purchase protection, many cards offer return protection, travel insurance and perks for using their cards, such as offers + perks.

  3. Effect Your Credit Score Credit card use is reported to the credit reporting agencies. A few things that are taken into consideration are the length of time the credit is open, your ability to repay on time and your ratio of credit utilization. Many credit cards, like SDCCU’s, also offer a quick look into your FICO® score (300-850). Keeping tabs on this number can help you learn how to increase it. Having a good score may allow you to obtain lower APRs when financing a bigger ticket item such as a home or vehicle.

  4. Assist in Emergencies While a healthy savings account is the best option, a credit card can help you in an unexpected emergency when you are unable to pay from your savings.
When used responsibly, SDCCU credit cards can be great for your financial well-being. From fraud protection to rewards, a credit card is a great option for many. Just remember to pay the monthly bill (preferably in full) by the due date.

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