A credit card is a plastic or metallic payment card issued by a bank, allowing the cardholders to borrow money. The cardholder is also able to purchase goods and services from various merchants based on their credit limit. In most cases, the cardholder is expected to pay back the money and applicable interest after a given period. If you are traveling upcountry or overseas, you may want to pay for travel expenses, book a hotel, and other accommodation expenses. Here are three advantages of using credit cards when traveling.
1- Safer to Carry Credit Card than Cash
If you are traveling overseas, chances are you will require huge sums to cater for your travel, hotel, and accommodations expenses. You don’t want to go around with that kind of money because of safety reasons. When you are traveling, you don’t want anything to upset your plans. Credit cards contain built-in security features that ensure that your money is safe. They have security features such as encryption, chip and PIN, and fraud monitoring technology.
This means there are minimal chances of your credit card being used without your authorization. Many of them have a zero fraud liability policy which adds another layer of security. Zero liability on a lost credit card protects the card if it gets lost or stolen. If somebody uses your card fraudulently, all you need to do is to notify your credit company and don’t have to pay for unauthorized purchases.
2- You Can Get Rewards Points
As a cardholder, you earn points by using your credit card. This is a great incentive to use your card any time you have the opportunity to use it to increase your reward points. Some credit cards have reward points for different categories of spending, such as restaurants and travel. The idea is to accumulate the rewards points and redeem them when they reach a certain threshold. You can use them to pay for your traveling or restaurant expenses, among other uses.
The trick is to take a credit card that limes with your spending patterns to maximize your reward points. If you travel a lot, you can get a travel credit card. Travel credit card will enable you to get easy foreign transactions and discounts on hotel stays and dining. Apart from this, you can receive a sign-up or welcome gift bonus, free lounge access, and what’s more, you can redeem the points at both domestic and international airlines.
3- You Can Build Your Credit Score
A credit card is akin to taking a loan from a financial institution. The card issuer expects you to settle the debt upon the agreed date. Some people don’t know that credit score organizations keep track of your payments and use it to rate your creditworthiness. Your credit score improves when you pay back the money in good time. If you default, the same will reflect in your credit score.
Credit cards become helpful because there are people who want to build their credit history but don’t have avenues to rate them. Your credit card payment history is shared with credit bureaus that use the information to rate you. If you have a track record of paying your debt in time, you will have an easy time accessing more credit from financial institutions.