Financial Freedom: On Independence Day, now is a good time to think about how we can achieve financial freedom in our lives. Of the many financial tools that can help us become financially independent, credit cards are perhaps the most popular. From increasing your credit score to giving rewards, credit cards offer many benefits that can boost your financial life. But that's not all. Credit cards can help us in many more ways. Let's find out what these are.

Increase your spending power

While your income typically determines your spending power, a credit card can increase it. Credit cards come with a monthly credit limit that can increase your existing buying power, helping you meet your financial goals. If you are short on cash, you can also take advantage of the Buy Now Pay Later (BNPL) facility that allows you to defer and split payments for purchases, making them more affordable.

Building and strengthening your credit score

A good credit score builds a good credit report, both of which are essential for financial stability and independence. Responsible use of credit cards is one of the most effective ways to build and improve your credit score. A strong credit score helps you get loan offers on favorable terms and conditions. Paying your credit card bills on time and keeping your credit utilization low are effective ways to build or improve your credit score. A high credit score of 750 or above shows you as a responsible borrower to lenders.

You can get a reward

Credit cards give you offers and discounts on your everyday purchases. To optimize these rewards, it is important to choose a card that suits your lifestyle and needs. Credit cards offer points, miles or cash back on most expenses. These rewards can be redeemed or used for discounts on travel, gift cards, groceries, dining, etc.

Cash Freedom

Credit cards free you from carrying cash and the hassles that come with it. Waiting to get the right change or struggling to break a high-value note are things of the past. To make a purchase, you simply need to swipe your card instead of handling cash.

Expense management and tracking

Credit cards allow you to track your expenses which can help with budgeting. Banks usually provide detailed statements for credit card usage. These statements can provide insight into your spending habits. By reviewing your statements regularly, you can identify areas where you are overspending and cut back as needed. Maintaining and following a budget can greatly help you on your journey toward financial freedom.

Better Security

Nowadays, credit cards offer strong security for your transactions and financial information. Cards today usually have electronic encryption and secure server connections to keep your card details safe. If you lose your card, all you have to do is contact your card issuer, who will cancel the lost card and issue you a new one.

When used wisely, credit cards can be your gateway to financial freedom. However, careless use can take a toll on your financial health. So familiarise yourself with the best ways to use your credit card and see how it opens up a world of possibilities for you.