Do you wonder why the credit card market continues to boom? Perhaps, you may even ask yourself what’s the secret to why some wealthy people own multiple credit cards. Thus, you may desire to know further if there’s a secret or smarter way of using credit cards.
Well, credit cards come with vast benefits to consumers. They offer a convenient way to pay for your purchases, and you benefit by having the ability to build your creditworthiness.
Are you aware that you can also benefit from using credit cards for your real estate investments? Yes, it’s as simple as managing your credit cards right and taking advantage of the rewards and offers.
Also, when you understand and apply the possible hacks in credit card management, you can go a long way in building your creditworthiness. As a result, you get to access a whole new world of investments and opportunities.
The truth is that if you’re a real estate investor, you must spend money. Please note that there are several expenses that come with real estate investment. And in this case, if you aren’t making use of credit cards for your real estate outlay, then you are losing out on exciting benefits.
Therefore, using credit cards for real estate transactions will form part of your money investment. As long as you keep using the cards for your housing projects, you might end up making the most of it.
How much you benefit from using credit cards for real estate transactions will depend on how knowledgeable you’re about using your credit card responsibly. Our article will enlighten you on how you can use credit cards to establish a good credit rating, earn rewards, and manage your finances better.
Let’s delve in.
What Are the Benefits of Using Credit Cards for Real Estate Transactions?
1. It Helps to Establish Your Creditworthiness
The perfect credit score possible can enable you to get the best interest rates for things like real estate, mortgages, or personal loans. Also, a good credit score can even help in short-term investments like renting an apartment.
When used appropriately, a credit card will enable you to build a good credit history over time. And, utilizing your credit card in continuous transactions will increase your credit score. Hence, you won’t have problems getting into bigger and more luxurious real estate projects in the future.
When you use your credit card responsibly for your real estate transactions, you can be able to establish or reestablish your credit history. So, if your credit score is poor, you get to improve your scores.
Also, responsible use includes observing credit card policies. Credit card issuers often have their terms and policies on how and when you should channel the refunds. So, you must ensure that you stay within the credit limit and make timely payments.
In terms of boosting your credit score, a significant benefit of credit cards is that they help build your credit history. Credit cards can only be harmful to your credit score if you’re irresponsible with your transactions, and you end up failing to pay on time.
But, the truth is that if you have a credit card, your credit score will improve continuously. As a result, you get to enhance your creditworthiness by:
- Building the sum of your available credit
- Reducing your credit utilization ratio
What if You Have a Poor Credit Rating?
If you’ve been struggling with debts for months or years, your credit rating most definitely has hit rock bottom. With a rating that’s too low, you might experience a paralyzing effect on your capacity to manage your finances.
Please note that a low credit score will make your life hard since you may not get approved for a credit card in the future. This could happen when you need it the most. Unfortunately, a poor credit score could negatively impact your ability to proceed with any real estate investment plans you might have.
Nonetheless, if you have a poor credit score but want to reap the benefits of using credit cards for real estate transactions, you shouldn’t worry. There are cheap credit repair affiliates that can intervene in your situation.
So, how will cheap credit repair services help you in building your credit history?
The most desirable and cheap credit repair professionals will help you get every negative item eliminated from your credit report at a cost-friendly budget. The top-rated credit repair professionals will do everything possible to get you back on track for a healthy financial future.
They work smart to ensure you:
- Avoid commercial debit card fraud
- Cancel credit repair
- Fix credit review
- Remove collection account from credit report
- Negotiate your case with prepaid credit cards that report to the credit bureau
- Guide you towards the journey of maintaining great credit scores
- Ensure you know how to work towards attaining the perfect credit score possible
- Remove paid collection account from credit report
Indeed, working with credit repair pros can be the best decision you can ever make. With great credit scores, you can smoothly transact with your credit cards for your real estate funding.
2. You Get to Access Attractive Bonuses and Rewards
A credit card may come with many perks, which can be attractive to many. For example, you may use your card to transact in short-term or long-term rental investment outlay. In this case, there are various travel benefits like:
- Free access to airport lounges
- Travel insurances
- Travel discounts
Usually, whenever you engage in cash or debit card transactions, you may not always receive the benefits that credit cards have. What’s more exciting is that as long as your account remains in good standing, your reward points won’t have an expiration date.
Other benefits may include redeeming your reward points for other products and commodities. You may also get annual fee waivers for your future transactions.
Indeed, obtaining a credit card is a direct ticket for you to start earning rewards immediately. Other large banks may even offer registration bonuses to their new customers. And because of the extremely high value of real estate purchases, you may quickly qualify for additional incentives and benefits using your credit card.
How Far Can Credit Card Rewards Take You?
If your points continue adding up, nothing will hinder you from going as far as acquiring a property investment using points. Please note that some credit cards come in the form of cashback cards.
This implies that you can save cash and use it later as a downpayment to finance a property. So, building up some free cash through credit card rewards can help you get into your next anticipated projects using points or cashback. Look at how this couple is using credit card points to purchase a multi-family investment property.
3. You Get Protected by the Law
Keep in mind that purchasing a property or transacting for real estate using your credit card means paying a huge amount of money over an extended period. Hence, some states and countries like the Philippines have laws that protect credit card holders from any abusive practice.
Federal laws offer significant protections for credit card users. For example, if you lose your card, you are not liable for any charges from transactions done after you reported your lost card.
You need to report to your card issuer promptly before someone else uses your credit card. Therefore, the credit card industry law regulation is one of the topmost benefits for credit card users compared to other forms of payment.
4. You Enjoy Faster Credit Card Transactions
Credit cards offer contactless payments. Hence, you don’t have to worry about carrying a lot of cash. You can comfortably make huge transactions like purchasing properties without the fear of losing money.
Since you don’t have to go to the bank or any other place for an over-the-counter (OTC) payment, you get to make your transactions faster on any agreed deal. Besides, you will have time to check through and confirm any payment you want to make.
Frequently Asked Questions (FAQs)
Can You Buy a Real Estate Property Using a Credit Card?
You cannot buy a physical real estate property entirely using a credit card. It’s not the same as purchasing a sofa set or television with a credit card. Usually, a standard consumer credit card will not offer a credit line that’s huge enough to cover the full property cost.
Even though you qualify for a large credit line that covers all or a portion of the real estate price, you’ll experience yet another challenge- The real estate company that’s handling the property deal will need you to provide payment using bank-certified procedures.
Usually, this is the only way to finalize a huge investment transaction. This may include a certified bank check, cashier’s check, or wire transfer.
What if I Lose My Credit Card?
Your credit card will always contain some security features. That’s why this card type is often more secure than cash or traditional debit cards. Your bank will most likely get notified as soon as you report that your credit card is stolen. Hence, it gets blocked and prevents any unauthorized use.
Also, if you notice any unlawful transactions, you can report them to the bank immediately. The financial institution will carry out an investigation and reverse transactions that you didn’t make.
Many people may be discouraged not to own a credit card because of the possibility of credit card debt. But, the truth is that many cardholders get to enjoy additional benefits including rewards in form of points or cashback, and greater financial freedom.
Most popular credit cards also offer new registrants sign-up bonuses. You can accumulate many points if you continue using your credit card to meet the spending requirements within the allocated time frame.
When you keep using your cards for purchases like real estate, there’s a great chance of getting more attractive bonuses and rewards. What’s more, is that you get to enjoy faster transactions using your credit card. Besides, consumers who use cards have protection from the law.
Therefore, using a business or personal credit card for your real estate transactions is the key. When you use your credit card appropriately, you get to build your credit history and attain great credit scores. With a good credit standing, you can benefit further and enjoy better interest rates on your real estate transactions, mortgages, and auto loans among other things.