Credit isn’t bad; the misuse of credit is bad.  Credit can be very dangerous in the hands of an impulse spender or a person who defines herself by her closet.  This can cause that individual to go into a lot of debt.  However, if used wisely credit can be very helpful.  Let’s face it.  Our credit score matters because we need it if we want to buy a home and we need to carry a mortgage, to apply for an apartment, and sometimes to even be considered for employment.  Instead of thinking that credit is bad, I want you to see the ways that you can use credit responsibly.

1. Short-term 0% interest loan.  If you have a large purchase that you need and you can get a 0% offer, then consider credit as a way of preserving your cash and paying for the item over time. For example, when I purchased my MacBook Pro I used a 0% interest for 12 months credit card.  I paid the purchase back in 9 months because I did not want to risk the interest coming due if something happened and I failed to pay the item off within the established time frame.  This was a great way for me to hold onto my cash, and leave it in the bank longer to get a few extra dollars in interest on my money.
2. Travel or cash back rewards.  If you travel a lot, then looking into a low fee rewards card can be very beneficial with earning perks such as free flights, free hotel stays, and no baggage fees.  If you use a credit card to pay for your daily items to earn rewards, then just make sure that you are paying the balance on time and in full to avoid interest and late fees.
3. Avoiding a hold on your checking account when traveling.  When you travel many hotels and rental car agencies place a hold on your account.  It’s better to have that hold placed on your credit card instead of your debit card because of the time that it takes to release the funds.  Some car rental companies may not even allow you to rent a car without a credit card, and if they do you may have to go through additional steps such as paying an additional deposit.  If you closely manage your budget, the cash holds can definitely add a layer of complication.
4. Avoiding car rental insurance.  Many credit cards offer the benefit of providing insurance when you rent a car, which allows you to decline the additional daily insurance cost.  Check with your credit card company first to ensure if they offer this and the terms of the offer.
5. Building credit.  It’s difficult to function in America with no credit or a low credit score.  Building a solid credit score allows you to get the best interest rates on home and car loans.  Even if you plan to use cash for a home or car purchase, you still may need credit when applying for a new job or apartment lease.  Also, insurance companies may run a credit check to determine your insurance premiums.  Having great credit can lower the cost of your monthly premiums.

There are many positive benefits to using credit.  The main thing is to only use it if you actually have the cash to pay the charges back in full and on time at the end of the month.  Otherwise, the revolving balance will incur interest costs.  Also, if you make a late payment, then not only will you incur a late fee, but you will lower your credit score.

Be sure to leave a comment to let me know how you plan to use credit.

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Aisha Taylor is a #1 Amazon Best Selling Author of the book “5+5 FNPhenomenal Ways to Save $100 This Week Without Killing Your Lifestyle”, the Founder of FNPhenomenal (Frugal –n- Phenomenal), and creator of The Live Phenomenal Program. The Live Phenomenal Program is a program designed to give you the tools that you need to totally transform your finances, and stop living from paycheck-to-paycheck. It’s time for you to be Financially Phenomenal! Book your complimentary 20-minute financial clarity session with Aisha here.

If you need deeper work around healing your relationship with money or overcoming your blocks and fears, maybe it’s time for some money therapy.