What Are the Advantages of Having a Credit Card?

Credit cards offer a number of advantages that allow you to make the most out of regular, everyday purchases. Whether through the rewards that some cards earn or through the increased purchasing power that a card can offer, you'll find that there are plenty of reasons to have a credit card at your disposal.

8 Advantages of Using Credit Cards

Let's take a look at some of the main benefits of credit card usage, so you can decide whether a credit card is right for you.

1. Earn Credit Card Rewards

Some credit cards offer rewards options that benefit smart users. While these options differ from card to card, you can find yourself earning cash back, air miles, travel discounts, points that you can redeem for great rewards, and much more. Simply pay your balance on time and use your card wisely, and you can enjoy all the benefits a rewards credit card has to offer.

When it comes to rewards, Citi has you covered. For example, the Citi Rewards+ Card earns you ThankYou® Points rewards from supermarkets, gas stations, and everyday purchases.

2. Help Building Credit

Using a credit card in a smart manner is one way to build your credit score. By pulling out your card for manageable purchases and making timely payments, you can start establishing a positive credit history, making your life easier for whenever good credit is needed, such as home loans, car loans, or anything in between.

If you're just starting to build credit, a secured credit card may be your best option. These cards often have lower minimum credit score requirements, although they typically require a security deposit as collateral.

3. Digital Tools and Account Management

Most credit cards come equipped with digital tools to help you easily make consistent payments and use your card responsibly. Mobile account management allows you to know your card's balance anywhere you need it, and payment reminders can help you from falling behind on paying off your balance and accruing additional interest.

4. Fraud Protection

With Citi's $0 Liability, you don't have to pay for unauthorized purchases on your account, and security alerts and card lock can guarantee that once you're notified of any questionable activity, you can take action as soon as possible.

5. Increased purchasing power

While credit cards work best for regular purchases you can afford, they can also provide you with increased purchasing power that will help you out in emergencies.

Car repairs and medical emergencies can be paid for with credit cards if need be, and sometimes credit cards will be the primary option for these payments if you can't access other funds immediately.

6. Not linked to checking or savings account

Credit cards aren't inherently linked to your checking or savings account. Instead, they're a revolving line of credit that you make periodic payments on using the money in those accounts. You can pay the entire balance or pay a portion of the balance. If you carry a balance, you will be charged interest.

This means that credit card usage doesn't have to drain your savings, and emergency purchases on your credit card won't immediately affect the money you've accumulated in your savings and checking. On the flip side, shifts in your checking or savings accounts won't immediately affect your credit card or your credit history.

Remember, though, that you will have to use your money in these accounts to pay off your credit cards in the future, so you shouldn't spend beyond the means of your checking and savings just because your card isn't attached to them.

7. Putting a hold on a rental car or hotel room

Credit cards can also act as collateral for short-term rentals such as rental cars or hotel rooms. This will usually mean that a certain amount of your credit limit will become inaccessible for a portion of the rental.

In many ways, this can be a great opportunity for travelers who may need the cash they would have used for a deposit on a car or hotel room rental. This way, a credit card can bring you added financial flexibility.

8. Travel Benefits

Some credits cards, like the Citi Premier Card, will also offer additional travel benefits, such as 24/7 concierge access with Citi Concierge, to give you the best experience no matter where you travel.

Select cards will also offer their fraud monitoring services to set up "travel notices," that can alert you whenever suspicious activity is appearing on your card while you travel.

Citi Credit Card Benefits Guide

While there are plenty of advantages to using credit cards in general, Citi Credit Cards also come with their own set of benefits.

What Are the Benefits of Using a Citi Credit Card?

Whether you're using the Citi Entertainment® program to buy tickets for once-in-a-lifetime experiences or you're consulting the Citi Concierge, you'll find that some citi cards offer value in addition to rewards like cash back, air miles, or points.

Responsible Credit Card Uses

Although credit cards can help you out in a pinch, they're best used for regular purchases that you already can afford. Once you make these purchases on your credit card, you should pay them off as soon as possible to avoid paying interest.

Credit cards are best used for either regular purchases or emergency necessities. Be careful before using your credit cards for luxuries that you normally would not need or afford.

What to Look for in a Credit Card

Look for a credit card that fits your lifestyle. Consider what the terms and conditions are for the different types of cards and whether you want to earn rewards.

In addition, you'll want to find a card that you qualify for. This means you must meet the minimum credit score requirements and be able to pay any necessary annual fees or security deposits.

Find the Right Credit Card That Fits Your Lifestyle

The right card for you will work well with your current lifestyle. For example, if you're not a frequent traveler, you may want to look at a card that rewards general spending, such as a cash back card, instead of one that offers rewards on travel purchases.

Citi has several credit cards available to compare that make finding the right card easy.

Bottom Line: The Advantages of Credit Cards

When used responsibly, credit cards offer several advantages that help you reach your financial goals. When coupled with the rewards offered by select Citi cards, you can make your purchases more rewarding in the short term while taking the time to build your credit for long-term goals and milestones.

Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.

Additional Resources

  • Utilize these resources to help you assess your current finances & plan for the future.

  • Learn how FICO® Scores are determined, why they matter and more.

  • Review financial terms & definitions to help you better understand credit & finances.