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7 amazing perks of using a credit card

Published on December 2nd, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Credit cards offer a variety of benefits over debit cards and cash. The key is to remain disciplined with your spending, or you could get into financial difficulties, otherwise they can offer some great benefits for just buying goods on credit.

According to the Australian Banking Association Inc., about 40% of adults have a credit card. This percentage is understandable once you see the benefits of using a credit card.

Easy and fast payments

With credit cards, payments are easy, in store and online, but also accepted locally and internationally and payments can be converted to local currencies. These payments reflect instantly on yours and the seller’s account, and you will not be charged a transaction fee. More so, credit cards allow you greater convenience than other payment methods. For example, you don’t need to pay upfront at some car rental companies as you can give your credit card details and then pay when you return the car.

Rewarded for spending

With around 193 credit card products, 67 providers, it means that Australia’s credit card sector has a healthy competition. Furthermore, with credit card companies making their money out of transaction fees charged to traders, they want you to spend so they offer incredible rewards. The key though is to get a card that matches with your lifestyle, so you can reap the benefit, but don’t go spending just to get points. Depending on the type of card, the rewards can vary from free flights on specific airlines to 1% – 5% cash back on purchases made.

Improve credit scores

Cash and debit cards do not build credit, but a credit card does, as there is a history of your spending. Then if you want to apply for a loan, and your credit card history is healthy, you will be in a great place of getting a loan and getting a better interest rate.

Security

With around 16 725 534 credit cards in circulation in Australia, with about 22 8598 000 transactions monthly, fraudsters are lurking. More so, there has been an increase of the overall amount of fraud on cards in Australia from $461 million to $534 million in 2016. However, unlike debit cards or cash, if your credit card is stolen you will have the benefit of fraud protection.

Monthly statements

You will get a detailed list of all the items you bought that month. You can use this list to manage your budget better. By having such a list will show you where you are spending your money, which is not so easy to do when you work with cash.

Emergency lines of credit

Most credit cards offer an interest free period before interest is charged. You can use that to your benefit. For instance, if there is an unexpected cost such as repairing your car, you can charge it to your card knowing that you have a grace period before you need to repay the funds.

Special invites and discounts

Depending on the type of credit card, cardholders can get discounts on hotels, airfares, but also free access to airport lounges, and pre-sale tickets and VIP access to concerts. For example, with Mastercard, some cardholders can get up to 30% discount on flights and hotel costs

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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