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There is a lot of fear and uncertainty about using credit cards, but the truth is that they can be a big advantage if you know how to use them responsibly. If you pay off your balance in full each month, you can reap many benefits. The main thing is not to charge for purchases you can’t pay for, as high interest rates and fees usually outweigh the benefits you can get by using a credit card.
Read on for five reasons why you should pay for every purchase with a credit card:
1. You get rewards and privileges
One of the main benefits that consumers can reap from making as many purchases with a credit card as possible (again, only those they can afford) is that they can earn valuable rewards and perks.
Along with more common benefits like cash back and travel points, many credit cards offer unique perks like discounts or credits that can be spent at major retailers and on rental car insurance. Frequent travelers may find that Travel Rewards credit cards can offer them many great perks, such as free airport lounge access, Global Entry and TSA PreCheck, free baggage check-in, priority boarding, and reimbursement for surcharges due to delayed or canceled flights.
Many of these benefits are permanent or offered to cardholders annually at no cost. But those who want to get a refund on their purchases (which they don’t get when they buy with cash), or who want to earn air miles or hotel points, will find that using a credit card instead of a debit card helps them save money. in the long run. That’s why it can be beneficial to use plastic for every purchase, especially if you have a cashback credit card that gives you back a percentage of your cash purchase.
2. You can improve your credit score
Once again, it’s important to remember to pay off your credit card in full each month. Not only will this save you money on interest and fees, but it will also help improve your credit history. A timely payment report and low credit usage (the ratio of how much credit you have versus how much you use) are two things that can really boost your score.
3. You stay safe
Carrying enough cash with you to make all your purchases isn’t very convenient, and you can’t use cash for online payments either. While a debit card may seem like the right choice, it lacks the security benefits that a credit card can offer.
The debit card is tied to your bank account, which increases the risk of fraud, especially when shopping online. The credit card is not tied to your bank account at all, so even if it is stolen, you only risk unauthorized payments, not someone gaining access to your bank account. If fraud does occur, the credit card issuer will cancel the credit card and cover most of the fraudulent payments thanks to the Fair Credit Billing Act (FCBA). By law, the maximum amount a consumer must pay in the event of an unauthorized charge is $50.
4. You can access buy and price protection
One of the best reasons to use a credit card for every purchase is that you can potentially access purchase protection.
Purchase Protection allows cardholders to file claims for eligible damaged or stolen items. There is usually a time limit in which you can file a claim, so if this happens to you, make sure you file it in a timely manner.
Price protection may also be available to you. Let’s say you buy a laptop for $1,000 on Monday and by Saturday it’s already $750. With purchase protection, you may be eligible for a refund.
Double-check your cardholder agreement to learn more about pricing and purchase protection options.
5. Easy to organize purchases
Using a credit card for everything makes it very easy to organize your purchase history. When you use a credit card instead of cash to make a purchase, you can simply check your bank statement to see everything you’ve purchased. It’s easy to view your expenses when you want to reset your budget or need to organize during tax season.
It can be helpful to carefully review your credit card statement each month to make sure all payments are made by you and are in the correct amount. This way, if an error or fraud has occurred, you can work with the issuer to resolve the issue. Even better, review your payments once a week to make sure you’re on budget and can afford to pay off your balance in full before making new payments.
bottom line
If you can afford to pay for everything you buy with a credit card when your bill is due, there is no downside to using it instead of cash. By earning rewards, accessing purchase and price protection, and increasing your financial security, you only benefit from using your credit card for every purchase.
Editorial disclaimer
The editorial content on this page is based solely on the objective judgment of our contributors and is not based on advertising. It was not provided or ordered by credit card issuers. However, we may receive compensation when you click on links to our partners’ products.
