A lot of people think of credit cards as a medium to pay without having to carry cash around. However, a credit card offers a lot many more advantages apart from offering freedom from carrying cash. In fact, you could use your credit cards to manage your finances efficiently. This is particularly important because your credit score or credit history will determine how much lenders are willing to trust you. Whether it is credit cards, loans, mortgages or insurance policies, the amounts you pay as premiums or interests would always depend on your credit score. If you have an excellent credit score in excess of 720, you are likely to save hundreds of dollars every year paid in loan interests and premiums.

A lot of people do not understand that a credit score of 720 as compared to a credit score of 600 could mean lower interest on the loans and a smaller premium for the same insurance coverage. This is because someone with a high credit score is considered more responsible and creditworthy by the lenders. You can use your credit card therefore to push your credit score further up and benefit from it in more ways than one. Your credit card, with its monthly expenditure report is an excellent way of overviewing your expenses and money outflows as that will tell you where you can save. By using your credit card to pay for your necessary expenses you can generate a good credit score. At the same time, by paying back the credit card bills on time, you can make sure you don’t have any debt, which is important for a good score.

You can also use your credit card for automated and timely payments of loan interests, instalments, EMIs and utility bills. That way there is no chance of missing out on any payments accidentally. When you make timely payments over a consistent period of time, you push your credit score up. On the other hand, those who are irregular with their payments and often miss the due date tend to have a lower credit score. Thus, credit card helps you to have a good expenditure cycle but at the same time manage it well to not run into debts at any point of time. Good credit score can help you get credit cards with excellent terms and loans with lower interest rates and credit cards can help you build that impressive score.

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