Covid-19 & Credit Cards
Updated: Feb 22
Credit cards are more common now more than ever. You see them being used everywhere you go. From retail stores, gas stations and even the mechanics shop. They are the backbone of online finance and huge online retailers like Amazon and eBay. There are many ways that they can be beneficial to you, so here are three tips to get the most out of your very own card.
#1 You can build credit.
It should come as no surprise that by using one of these cards you are forming a trust between your financial institution and yourself. This means that your bank will temporarily loan you money to cover your expenses. When you repay the balance to the bank by making your monthly payments it helps improve your credit score. The improvement to your score may be a slow burning one, but it certainly has a positive effect over time.
#2 - They are convenient.
Being able to carry a small plastic card in your pocket, purse or phone case is much easier than lugging a wallet full of cash and change around. One of the most popular uses of these cards is for online shopping. Most major retailers that you will shop with offer the option to save your card information on their website. Simply save your card information and the next time you shop there your card will be on file and your checkout time is cut down to mere seconds! How convenient is that?
#3 - They are safer than other payment methods.
I will save you the boring specifics about encryption and data protections put in place by companies that specialize in finance. The short version is this: they put a lot of time and effort into keeping your money safe. Carrying cash is not only inconvenient but can also be dangerous as well. More and more card companies are developing smartphone apps for easy mobile banking. Within these apps there is generally an option to deactivate or temporarily pause the use of a card. Say you lose your wallet. Simply log into the app and temporarily turn the card off. If someone attempts to use it either online or in person at a register, it will simply not allow the sale to complete. This option offers a great piece of mind that financial security is a mere tap or click away.
Ensure that you pay off as much of your credit cards balance each month as possible. Any leftover balance is usually charged interest. This is commonly referred to as APR, or Annual Percentage Rate. This is not necessarily a negative charge, nor is it any type of late fee. It is simply a motivation to pay your balance in full. APR will also vary based on your credit history and individual bank. Make sure to speak to your financial advisor or an employee of your financial institution about APR and its related costs to you.