10 Reasons You Need a Credit Card

Although credit cards get a lot of bad press when it comes to personal finances, they do offer a number of positives that, for the right people, make them an excellent financial tool.

The assumption, of course, is that you pay off your credit card balance every month. If you fail to pay off the credit card balance every month, the amount you pay in interest will quickly negate a lot of these advantages. For those who have the discipline to pay off their balance each month, here are 10 great reasons to carry a credit card:

1. Boost Your Credit History and Score

Getting a credit card will help establish and improve your credit history, as well as increase your credit score. Your credit score can affect a wide range of payments, and the better your score, the less you will have to pay. A high credit score may mean you pay an interest rate several points lower on a mortgage loan than the rate someone with a poor credit history would pay; this can mean thousands of dollars in savings over the life of the loan.

The same is true with an auto loan. A good credit score can mean paying less on many insurance products, such as homeowner's insurance and auto insurance. It can even be the difference between getting a job or not, since many employers now pull potential employees' credit scores and eliminate those with poor credit histories. Establishing a good credit rating by showing responsible use of a credit card will mean significant savings during your lifetime compared with those with a poor credit history or none at all.

2. Internet Purchases

Having a credit card can save you money on the items you purchase. Some of the best deals available are now found on the Internet. In many instances, the only way to pay for these Internet purchases is with a credit card. If you don't have a credit card, you may have to pay more for the exact same thing you could have purchased online, not to mention the extra cost of driving to get the item.

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