Why use a credit card

Here are 6 reasons why people use credit cards to purchase items:

  1. To help build savings. By avoiding transactional bank account fees and keeping money in a high interest bank account longer (until the credit card due date).
  2. As an interest free loan. What’s important here is that you understand the ‘loan terms’. That is, when do you have to pay the money back and what will happen if you don’t. Generally, if you pay your credit card off in full each month, you will avoid paying interest.
  3. To help monitor spend. Credit card transaction records can be very specific and can be used to itemise where you are spending money. This can help you to build a budget and look for areas of saving.
  4. To benefit from rewards programs. By using a credit card to purchase items you would purchase anyway (and pay off without paying interest or late fees) you can benefit from rewards programs offered with some credit cards.
  5. To build a strong credit rating. By paying off your credit card on time you will be building a positive credit rating. This can help you when it comes time to taking out bigger loans such as a car loan or home loan.
  6. Pay off your home loan sooner. By leaving funds in your offset account longer (until the credit card repayment due date) you will be reducing the amount you are paying interest on, which means you’ll be paying more off the principal. 

The information provided to you is general and may not be appropriate for you. To approved applicants only. Conditions, criteria and fees apply to products. Please consider the Guide to Heritage Deposit Products or the Guide to Heritage Credit Card Products (available in-branch, by phoning 13 14 22 or at www.heritage.com.au) before you decide whether a product is right for you.

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The information provided to you is general and may not be appropriate for you. Conditions, criteria and fees apply to products. Please consider the Guide to Heritage Deposit Products or the Guide to Heritage Credit Card Products (available in-branch, by phoning 13 14 22 or at www.heritage.com.au) before you decide whether a product is right for you.

* Based on a $150,000 loan over 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

The information provided is intended as general information only. Blogs have been prepared without taking into account your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness having regard to your objectives, financial situation or needs. You should consider obtaining personal investment, taxation and/or legal advice before making any decision.  Please consider the Guide to Heritage Deposit Products and Guide to Heritage Credit Card Products (available in-branch, or at www.heritage.com.au) before you decide whether a product is right for you. All loans and credit cards are subject to application and approval. Conditions, criteria and fees apply and are subject to change without notice.