(BPT) - In our rapidly changing world, digital transactions are increasingly preferred, with more consumers opting for electronic payments, including contactless methods. Credit cards, a standard part of daily life, offer benefits to consumers while supporting small businesses. They serve as vital tools for managing costly expenses over time, addressing unforeseen financial needs, and establishing a positive credit history that can aid in securing loans for your first home or vehicle.
Here are a few key reasons credit cards are valuable for consumers and small businesses alike:
Credit Card Perks For Consumers:
- Customers Value Rewards: Credit cards offer different rewards programs, such as cash back, points, or miles. Many people rely on those travel rewards and cash back to plan more affordable vacations and unique experiences they otherwise might not be able to afford if they have to pay full price.
- Fraud Protection: Credit cards provide an additional level of protection against fraud that other payment options simply can't offer, making them the preferred payment method for 79% of Americans for security reasons, according to a PYMNTS study. Purchases with a credit card are routed through secure payment networks with fraud prevention measures lined up to help eliminate data security risks. This makes credit cards not only the more convenient form of payment, but the safer option too.
- Customer Convenience: CNBC reported that the travel industry took a hit after the COVID-19 pandemic. So much so that many tourism and transportation rental companies have significantly reduced their fleet to avoid bankruptcy, creating limited stock for customers in need of rentals. Credit cards provide the convenience of pre-booking services like rental cars or hotel rooms, making them particularly advantageous for coordinating travel plans, with many hotels and tourism companies offering discounts and additional perks for credit card payments.
- Building A Secure Future: Credit cards allow consumers to build a solid credit foundation that will support the need to take out loans on the big purchases down the road, like buying a house or car.
Benefits for Small Businesses:
- Customer Convenience: People are more likely to have their credit card handy than to have exact cash for a purchase. Businesses that allow credit card transactions give customers the flexibility and freedom to pay their way, both in-store and online.
- Business Credit Cards Build Your Brand: A designated credit card for consumers can be a strategic tool for small businesses to attract and retain customers, foster loyalty, and provide insights into customer behavior. They can also drive customers to make larger purchases and increase overall sales.
- Enhanced Financial Control: Allowing credit card transactions may simplify expense tracking and financial management, helping small businesses maintain better control over their finances. Credit card payments can also improve a company's cash flow by ensuring timely and secure transactions, reducing the risks associated with delayed or failed payments.
A proposed credit card routing bill, if enacted, could adversely affect small businesses and consumers, by potentially cutting rewards programs and reducing data security. It's important to maintain the numerous advantages that credit cards provide to individuals. Credit cards are versatile tools that offer enhanced security and rewards for consumers while providing numerous benefits for small businesses, including customer convenience, brand enhancement, and improved financial control.
