As our world becomes increasingly digital, cash is slowly falling to the wayside. Credit cards have become a great way to use your laptop to make all your purchases from grocery shopping to making a purchase at a store thousands of miles away. Many people are choosing these plastic cards over cash for their convenience and safety. As you explore opening and using your credit card, read all about the top 3 reasons people are choosing credit cards for their day to day financial needs.

1 – Build Your Credit Score

A credit score is the number that third parties use to make a risk assessment on whether you are a strong candidate for a credit card or loan. 35% of your credit score is based on your Credit History because it shows lenders your pattern of borrowing money and paying it back. To build this section of your credit score, you need loans to show a payment history.

One of the easiest loans that you can open and continue to pay off every month is a credit card. Every time you open a credit card, that is reported to the three credit bureaus. Your lender also reports your timely payments along with any missed payments. Your credit history will grow positively as long as you pay your credit card in a timely manner and make sure to not overspend. In turn, this will increase your credit score. When you have a strong credit score it will help you get a better loan. For example, with a higher credit score you have the chance to get a lower interest rate and a higher credit limit. With strong credit comes many great opportunities to save money and reach your financial goals. Your credit card can help build your credit so you have more options with your loans. 

2 – Higher Level of Security Than Cash

As you go through your daily routine, there is always a chance that you will lose your wallet, or have it stolen. If you were carrying cash, you won’t get that money back. There is no security connected to cash. If you lose or have your credit card stolen, there are security measures to prevent unauthorized activity with your card. One of your first steps should be to call your financial institution and hold or freeze your card so that no one can make purchases on it. Sometimes you may not even lose your credit card, but someone has taken your information. Unlike cash, financial institutions can monitor your card activity and warn you about suspicious activity. Plus, you have the power to dispute activity on your card without losing any of your money. Your credit card lets you breathe easy with the protection it offers.   

3 – Earn Rewards as You Spend

Your money should be working for you. Whether you invest in stocks or put your money in a higher yield savings account to earn more, your money should be benefiting you even when you spend it. Many credit cards offer rewards or cash back programs. So as you swipe your card you will earn a certain amount of points or money towards a certain purchase. For example, as you use your Velocity Community Platinum Rewards VISA you will earn points for every purchase. As you earn points you can redeem them for different rewards like, travel, cash, gift cards, and merchandise. If you use your credit card for regular purchases, the rewards will add up fast and you will experience some great benefits for using your credit card. 

Credit cards are a great choice for building your credit score, maintaining security, and earning rewards when used wisely. Just like anything with your finances, make sure to think about where your money is going and what money you have coming in so that you do not overspend. Credit cards come with great benefits that you can use to better your financial life.