Four Simple Ways to Boost Your Finances With Credit Cards

Think credit cards, finances, and all that money talk are intimidating? You're not alone. Many people approach the world of credit cards with caution, worried about potential pitfalls like hidden costs and loan scams.

But don’t worry--these are largely misconceptions. In reality, using credit cards is the easiest way to enhance your financial security. Credit cards, when managed responsibly, offer a range of benefits beyond just transactions. From enhancing purchasing power to providing valuable perks like travel insurance and cashback, you can harness the full potential of credit cards to achieve your financial goals.

Here are five reasons you should sign up for a credit card in the UAE ASAP:

Protect Your Precious Purchases

Photo by Fili Santillán on Unsplash

Little-known fact: Many credit cards include purchase protection, which provides coverage against theft or accidental damage for items purchased using the credit card. It’s also valid for purchases that go missing or do not work as promised.

• Do: Use your credit card for significant purchases to benefit from purchase protection, and make sure you keep your receipts safe!
• Don’t: Delay reporting any issues in case of theft or damage as the coverage period for purchase protection is generally a timeframe of 90-120 days.

Purchase Your Wishlist With Flexible Payment Options

Photo by energepic.com from Pexels

I see it, I like it, I want it, I got it. Credit cardholders can convert large purchases into installment plans, allowing them to spread out payments over several months. Make purchases great again.

• Do: Use installment plans for large, planned purchases to manage your budget effectively, and make sure to compare interest rates before opting in.
• Don’t: Miss installment payments, as this can incur penalties.

Protect Your Life With Credit Shield

Shutterstock

Worried about how you’ll pay for an unforeseen illness or handle a sudden layoff? Credit Shield typically covers the outstanding balance on the credit card up to a certain limit in the event of involuntary unemployment, disability, critical illness, or death. This coverage helps prevent the accumulation of debt during times of financial hardship. Essentially, your credit card has your back–but at a small cost. There is usually a monthly premium associated with Credit Shield, which is calculated as a percentage of the outstanding balance on the credit card.

• Do: Regularly check your credit card statements to see the premium charges and ensure coverage is active. Familiarize yourself with the fees associated with your credit card.
• Don’t: Ignore the additional cost of the monthly premium when budgeting your expenses. Additionally, don’t rely solely on Credit Shield without having a broader financial safety net in place.

Debit Card Maxed Out? Lean on Your Credit Card with Loan on Card Options

Shutterstock

Loan on card typically refers to a specific feature where cardholders can convert their credit card's available credit limit into a loan. Cardholders can request to convert a portion of their available credit limit into a loan, which can be incredibly helpful when one needs quick access to funds for financing larger purchases or managing unexpected expenses--like paying a large security deposit.

• Do: Pay off the loan as quickly as possible to minimize interest charges.
• Don’t: Use the loan on card feature for nonessential or impulsive purchases.