Published On Dec 22, 2021
In this video I am going to look at the Benefits of Using Credit Cards, and why you should always use them for the things you buy.
/ @financialinterest
My Background with Credit Cards
Sep 2019 – AED 52,000 of credit card debt (around $14,000).
This is when I had just come back from a few big holidays including going to the Rule 1 Workshop in Atlanta and a trips to the Philippines and Thailand.
Living beyond my means for a number of years. Working hard and then taking big holidays.
During covid there was a lot of uncertainty around whether I would have a job, but luckily I kept my job. In this time, I realized I needed to get my card paid off and back to a level playing field! During the following year I couldn’t travel which was one of the major sources for expenses I had. Although I wouldn’t have chosen not to go and see my family, it did allow me to clear my debts and then start using credit cards properly to benefit me.
Benefits of Using Credit Cards
So you could use to you debit card to pay for everything you buy by using the money in your bank account, but you don’t get rewards from spending your own money! You get rewarded for spending the bank’s money!
- You can get a lot of different rewards and bonuses - Airmiles, Discounts on hotel stays, travel insurance, car rental, entertainment, dining and much more!
- Credit score – By having a credit card and proving you can purchase items and pay it off will improve your credit score as you are someone the bank can reliably lend money to who they know will pay it back.
- Payment Protection – If your card is used fraudulently you can claim your money back. A lot of the time the bank might alert you of any suspicious transactions, for example your card has been used in another country.
- Create payment plans. When I purchase an item on credit card in the UAE I have option to convert that purchase into month installments over a period of say, 6 months at a low interest rate.
Tips
But….. You have to play game properly otherwise you will end up in. a lot of trouble!
- Don’t buy something you wouldn’t be able to afford from your normal account.
- Never let the balance carry over, make sure you pay the balance in full each month. You will always hear the importance of compounding in your investments because with time that exponential growth will start earning interest on the interest. The reverse of course is true if you don’t pay your credit card bill off in full. You will start to accrue interest on the interest and pretty soon you will be struggling to pay anything off except the interest. This happened to me and can happen very easily so you should avoid it.
- Don’t withdraw cash from the credit card as you will face a large fee for doing this.
Enjoy the video!
Timestamps
0:00 – Intro
0:31 - My Background with Credit Cards
1:59 – Benefits of Using Credit cards
3:31 – Play by the Credit Card Rules
4:25 – Using Etihad Airmiles to Pay for My Flight
5:28 – Outro
Follow me on Instagram
/ financial_interest
Let’s connect on Twitter
/ fin_interest
Playlists
Individual Stock Analysis Playlist
• Individual Stock Analysis Process
Financial Statements Playlist
• Financial Statements
Valuation Methods Playlist
• Valuation Methods
Investing Terms Playlist
• Investing Terms
Passive Investing Playlist
• Passive Investing
Personal Finance Playlist
• Personal Finance
Great Investor Quotes Playlist
• Great Investor Quotes
#financialinterest #creditcards #benefitsofcreditcards
Disclaimer: Dan Powell is not a financial advisor. All content is for education and entertainment only. Always seek assistance from a qualified professional before making any investment decisions.