Using a credit card to manage payments
It is actually fairly simple for a credit card holder to avoid being charged more, i.e., incurring interest: simply pay off the charges made within the permitted period. There is no reason why one cannot effectively manage their budget using a credit card if they are able to do so with cash. As such, they won't experience any consequences and will just have the freedom of immediate money and interest-free payments.
That’s not the only benefit though. Various insurance plans or monetary rewards become available to users of credit cards, increasing the cards’ value even more.
Are credit cards even necessary?
Credit cards aren’t inherently “good” or “bad”. They’re simply another tool made to facilitate transactions and it is up to the user to put them to good use in their daily lives. Sure, one can live without them, but the necessities of contemporary life necessitate the freedom that a credit card provides. For instance, using a credit card greatly simplifies or expedites the procedure of renting a car or making a furniture purchase.
It’s not just that either. A credit card's immediate liquidity can help with a variety of demands that would otherwise undoubtedly take longer to be met.
Is increasing the credit limit a good idea?
The bank's perception that we are more dependable and low credit risk is essentially what an increase in credit limit entails. The person managing the card must use it properly, which includes paying off the full amount charged on the card or even just a portion of it on time, depending on their needs, just as in the case of managing cash, debit cards, or credit cards with a limited credit limit. Given the additional liquidity provided by the credit card, the benefits significantly outweigh the possible risks as long as this healthy relationship is maintained.
Similarly, there is no justification to run up an unnecessary credit card load if a consumer has a strong salary and can, thus, afford a reasonably high credit limit. Simply said, the consumer has the power to reduce extra costs that they would have incurred otherwise.
As such, a credit card can be a valuable ally and offer advantages to the modern consumer in a variety of ways.