Fashion Finance: Why Use a Credit Card?

This post was brought to you by Jennifer Viloria.

Sometimes it can seem a bit too easy to 'put it on the plastic' when it comes to cheeky purchases that you don’t have the cash for straight away. But credit cards are not risky – even in the hands of fashion fanatics – provided you know how to use them.

What many people don’t realize is that if credit cards are used sensibly they can actually earn extra money to spend on clothes. Here’s a look at the advantages of credit cards when it comes to funding your fashion fix.

Reward Credit Cards
There are a number of credit cards that offer points every time you make a purchase. This idea is now a familiar one, and many people collect points every time they shop at the supermarket. The key with credit cards is to find out how much the points are worth.

A reward system may seem like a good deal at face value, but work out what the reward system means in actual terms, and how much you will earn per transaction. By shopping around you can choose a card that has a genuinely useful rewards system.

Cashback Credit Cards
Some cards go even further and gift you directly with cash every time you use the card. The money is tax-free and can be used anyway you like for any purchase. This means more money to spend on the clothes you love. The reward could be as high as 5% in the initial months.

Of course, lenders don’t do this just to be nice. The interest on these cards is high so if you forget to pay off the debt you will be charged accordingly. The way to get round this is to set up a direct debit or ACH (Automated Clearing House) payment so that the full amount is paid off every month.

In addition to reward and cashback credit cards, there are also cards with 0% interest. Just make sure the card is completely paid off before the end of the 0% period. By reading the terms properly and making full repayments, a credit card could be a handy tool when it comes to maximizing your fashion finances.