Six Huge Problems for Those Not Using Credit Cards

Have you ever met anyone who balks at the idea of using a credit card? As surprising as it may sound, a large number of people are still unaware of the numerous benefits that this credit instrument has to offer. There's no doubt that the reckless use of credit cards can be disastrous. However, what is also certain is that this piece of plastic, if used carefully and responsibly, can add ease and convenience to life.

Here are the top six difficulties faced by individuals who don't use credit cards:

1. No Credit History or Credit Score: Your credit score not only determines whether or not you can borrow money – and if so, at what rate, but it also influences everything from insurance rates to employment opportunities. To have a credit score, an individual needs at least one credit account that has been open and active for at least six months. Many consumers use credit cards, or become authorized users on others' credit cards, simply to establish or repair their credit history. While the same goal can be achieved through other types of loans (such as student or auto loans), credit cards are among the most popular tools used for this purpose.
2. Little or No Fraud Protection: In case of fraudulent transactions, a credit card user has no liability as long as he reports the event within a specific time frame. Even if he doesn't, federal law dictates that his maximum liability is limited to $50. In comparison, with ATM or debit cards, failure to act quickly can leave you with liability for unauthorized charges when your card is lost or stolen. Of course, if you report the loss or theft of the card immediately, and the card has not been used, then there is no liability. If you notify the bank within two business days after the card is missing, your liability is limited to $50. If you notify the bank after more than 2 days but within 60 days, your liability is up to $500. However, if you fail to notify the bank within 60 days after your bank statement is mailed to you listing the unauthorized expenses or cash withdrawals, then your liability is up to the full amount that has been stolen.
3. No Rewards or Perks: Most credit cards offer cash-back or points on purchases. Accumulated points can be exchanged for gadgets, gift certificates, frequent flier miles and numerous other such items. Depending on the card you choose, you may also avail of perks like roadside assistance, travel insurance, rental car insurance, extended warranty and price protection. No credit card means that you miss out on all these rewards!
4. More Complicated Transactions: While renting a car or booking a hotel, you may be required to provide additional documentation to prove your identity. You may even have to pay a security deposit to complete the transaction. However, such transactions become much easier if you use a credit card, as there is no longer any need to fulfil these requirements.
5. Problem in Maintaining Records: Credit cards help with recordkeeping, as the monthly statement lists all the transactions made by the individual during that particular period of time. On the other hand, a person using cash to meet all his or her expenses may have difficulty tracking how much was paid, where and when.
6. Difficulty during Emergencies: Credit cards can be used in times of a liquidity crunch and for dealing with unexpected expenses or emergencies, such as sudden hospitalization or urgent car-repairs. They may even be used to withdraw cash at ATMs, if required. Credit cards allow you to break down big purchases into affordable and budget-friendly installments.

Especially for Businesses: What about when you r business needs credit? Our team at Fund&Grow has helped organizations in all 50 states create 0% business financing, and we can do the same for you! If you are someone with good credit who needs $50,000 – $250,000 for your business, we can probably help you. Call us at (800) 996-0270 to learn more!