When used responsibly, credit cards can be a great financial asset for athletes. I started using credit cards a few years after college and since then, I’ve cashed in on rewards and other tools to help me boost my finances.
I also want to point out that credit cards aren’t the only way to profit from spending- I have friends who prefer to use only cash to purchase items. While there’s nothing wrong with that, I feel like they’re losing out on extra benefits that come with responsible credit card usage. For the disciplined athlete reading this, here are a few reasons credit cards can be one of your best allies in building wealth.
6 Advantages of Owning a Credit Card
Builds credit. Using a credit card responsibly can help you build your credit score. By making payments on time and paying balances in full, a higher credit score will most likely help you qualify for big ticket items like furniture loans, car loans or home loans.
Rewards and perks. One of the things I value most about my credit cards is that they give me cash back, miles and other perks I can redeem once my balance is paid off. I’ve used my perks in the following ways:
- Cash back. I’ve redeemed cash back rewards to pay off bills, buy something nice, or put that cash into may savings account.
- Travel perks. Kurt and I have both use credit cards that give us benefits like concierge services prior to travel, which have been really helpful in securing flights, hotels and rental cars in advance of our trip. Speaking with an expert on the phone saves me so much time when planning trips for my family.
- Points. Similar to cash, I’ve redeemed my credit card points for multiple things- holiday gift cards for family members, points towards experiences for myself, or cash back.
Security. A few times I’ve had fraudulent purchases show up on my credit cards. Using a credit card helps protect me from losing money because my credit card company won’t hold me accountable for those types of charges. With many credit cards, you’ll have access to security alerts, card lock options if your card gets stolen, and other features to give you the peace of mind knowing your credit card company is keeping your money secure.
Balance transfers. There was a time that Kurt and I had debt from different purchases related to our first apartment renovation. To help us pay off this debt, we decided to transfer our balances from multiple credit cards onto one card. We also benefited from 0% percent interest offers for a few months. This was really helpful because it helped us catch our breath and allowed us to focus our energy into paying off our debt from one source.
Credit monitoring. Besides helping you build a good credit score, credit cards can provide you with free credit reports. Every few months I’ll log onto my Chase app and check my credit score to make sure my score is still good. This service also helps me see when and why my credit score changes, which is helpful if I plan to make big purchases in the future.
Tracks expenses. Similar to a bank account, credit card transactions are all kept on one transaction sheet. With the exception of my mortgage and utilities, I use my credit card to pay for almost all of my expenses. At the end of each month, I can review my spending through my credit card statement and find ways I can help budget better.
Other tips:
- I always try to have the cash needed to pay my balances up front or in full. This way I avoid going into debt or putting pressure on myself to pay off my credit card balance before the interest hits.
- Always read the fine print, especially when it comes to interest rates. Credit cards with little or no APR might be a great deal, but understand when those promotional periods end so you don’t incur extra fees.
- Pay bills on time! In order to prevent getting dragged down by fees, pay your bills on time, even if it means paying the minimum balance. This will prevent you from having a poor credit score or being denied from other loans in the future.