Why Do You Need A Credit Card?

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Why Do You Need A Credit Card?
The first credit card was introduced in 1958 by Bank America. The Bank Americard eventually became the Visa card. That same year, American Express introduced its charge card, and the face of buying and spending money was changed forever. In 1966, a group of California banks joined together to create the Interbank Card Association and launched MasterCharge – now known as Mastercard, and the stage was set for a complete revolution in the way that Americans – and eventually the world – does business. In 1966, when MasterCharge was introduced, there were about 5 million credit cards in use. The company enrolled over 12 million users in its first year through advertising and promotions. By 1996, some estimates put the number of credit cards in use in the United States at 1.5 billion. Clearly, credit card companies offer benefits that are nearly universal. Money for Purchases, emergency and otherwise The major advantage (and some would argue, disadvantage) of credit cards is that they allow you to make purchases that you can’t afford to pay for right away. The buy-now-pay-later concept isn’t actually new to this century – it was originally used by European furniture makers to allow their customers to furnish their houses all at once and pay for their furnishings over time. The original advertising for Mastercard and Visa focused on having money available in an ‘emergency’ – but it wasn’t long before they turned to focus on immediate gratification. Why wait when you can have it right now – and pay for it later? A credit card allows you to replace that broken refrigerator NOW, when you need it, without having to do without it for months while you save the money for it. It means you can take advantage of an incredible bargain on a new computer that might not be there when you’ve had a chance to save the money. It allows you to spread the expense of a major purchase over several months so that you can buy things that you couldn’t otherwise afford. Convenience Credit cards offer the convenience of not having to carry a lot of cash with you. They allow you to purchase goods and services in situations where an actual exchange of cash is impossible – like over the internet. Protecting Your Money If your wallet is stolen, you can pretty much kiss any cash in it goodbye. Credit card companies limit your liability in case of theft or loss of your credit card by immediately stopping acceptance of the card for purchases, and limiting the amount of charges that you’ll be liable for in that case. Credit Establishing credit is one of the major reasons that people use credit cards. When you need a loan for a major purchase like an automobile or a home, banks and lending institutions will look at your credit history – reported by banks and credit card companies. A history of paying credit cards on time establishes that you are a good risk for lending money. No credit history is one of the biggest reasons given for denial of loans. Record-keeping Detailed statements kept by credit card companies and mailed out to you monthly (or stored online) are an accurate way of keeping track of your expenses. This allows you to budget more efficiently and report all expenses for other purposes – like taxes.
Why Do You Need A Credit Card?

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