Is money destined to become digital? Let’s hope so. As technology continues to reshape and redefine every industry in the world, and as emerging economies continue to evolve and improve their standing in the global marketplace, we should expect to see an increasing number of countries adopting digital payment methods as a standard form of monetary transaction. In other words, money is no longer limited to cash and physical coupons, as technology is quickly revolutionizing the way money is used around the world.
Of course, credit cards and other forms of “alternative” payment methods are becoming prevalent in developed and established economies, such as the US, Australia, Sweden, Canada, and South Korea, to name a few. But that doesn’t mean that developing countries are not trailing behind, so let’s take a look at some of the key factors and benefits of credit cards that drive this rise in popularity.
The obvious convenience factor
The first and most obvious benefit that credit cards bring to the table is convenience. And it’s not just about being able to pay the exact amount of the bill without counting your cash or carrying paper money with you all the time, it’s also about the convenience of storing your money in a safe space, an account you can access at any time. Combining credit cards with innovative banking systems and dedicated money management apps is, therefore, one of the best ways to stay in control of your finances.
However, it’s important to note that this transition doesn’t come easy, but is well worth the investment. In Sweden, for example, the government spent a decade on its electronic payment initiative, in order to get people to adopt electronic payment methods and reap the benefits of a cashless way of life. Nowadays, only 15% of payments are conducted with paper bills in Sweden, and interestingly, there are over 4000 people who have had microchips implanted under their skin to make financial transactions even easier. Talk about moving towards a tech-driven future.
Use your line of credit to finance purchases
In addition to that, credit cards allow you to make purchases using your line of credit. You simply can’t do that with cash which explains why pretty much every adult Australian has a credit card — and some have more than one!
What’s even better is the fact that there are credit card issuers out there that offer zero interest on credit use if you don’t breach the limit and pay your statement balance on time and in full. That means you can easily use Humm90 interest free credit card in Australia to spread out the payment
s for larger purchases over a longer period of time. Yes, it is true that you should avoid using your line of credit altogether, but it’s also important to note that credit can be extremely useful in emergencies, which is something only a credit card can provide.
Collect and redeem your rewards
One of the main reasons why people around the world are increasingly switching to electronic payment methods and credit cards in particular, is because credit card programs come with various long-term benefits and rewards. The more you spend using your card, the more rewards you will earn over time that you can redeem in various ways, whether you’re collecting air miles or if you’re collecting store points. That said, it’s important to note that not all credit cards offer the same rewards.
In order to find the right reward program to suit your immediate or long-term needs, it’s important to compare credit card options from various issuers so that you can find the cards with the lowest interest rates, highest credit limit, and of course, the highest reward rate possible. When making your switch to a credit card, don’t spring for the first option that comes up, rather take your time to compare and contrast.
Keep records of your spending
Without a dedicated money management app where you can note down every single financial expenditure, you can’t effectively keep track of your financial habits. This is one of the main drawbacks of cash, because handling physical currency doesn’t allow you to monitor your expenditure seamlessly, so an expense is bound to slip through the cracks at one point or another.
This isn’t a problem with a credit card, because the account is stored on the bank’s servers, and every single financial transaction is tracked in real time. With a push of a button on your phone, you can easily check your balance and your financial report for the past week, month, or even year.
Staying safe in a digital age
Another important reason why credit cards should overthrow cash in the years to come and as emerging economies start to raise their GDP per capita, is because of the inherent safety that electronic payment solutions bring to the table. Quite simply, you can lose your wallet and all of the cash in it, and you would probably never see that money again, but if you lose a credit card, all you have to do is ask for a new one. This is because digital money is stored in your bank account, protected by a strong firewall, as well as your unique PIN.
What this means for the average consumer is that credit cards offer a new level of financial safety, and this becomes even more important when you’re using various internet services, because online banking and electronic transactions allow you to prevent nefarious activity when you’re making a purchase.
Physical currency is still the predominant method of payment in the world, but there is no denying that money is destined to become fully digital in the decades to come, and for a number of compelling reasons. With these tips in mind, consider reducing your cash use, and be sure to explore all the benefits that electronic solutions bring to the table.