Scared to use your credit card? You’re not alone, especially when there seems to be more logical options. Debit cards have several advantages: they’re convenient, secure, and interest-free. Some people may even find it easier to keep a budget with a debit card. Of course, you can always pay in cash as well, to avoid credit card debt.
You may think you can get away with using a debit card or cash to make all your purchases. Maybe – but it’s not the smartest financial move you can make. There are times when using a credit card for purchases makes more sense than debit or cash. Here’s 7 situations where it’s your best bet to pull out the plastic.
Credit cards aren’t just the smartest choice here – they’re the safest as well. When you buy things online, your card company is on the lookout for fraud. If you or the company spots a fraudulent charge, you can get it reversed and get your money back. If this were to happen with a debit card, you’d still be liable for the unauthorized charge.
You’re walking the backstreets of France, enjoying your vacation. You thought you had a wad of money in your pocket for souvenirs – but it turns out you’ve been pick-pocketed. That lost cash can’t be replaced.
If the person stole your credit card, however, you could get that cash back, because you’re not liable for the unauthorized charge. Using your card may also open up other perks, including frequent flyer miles or discounts on rental cars.
Retailers often offer extended warranties on appliances and electronics. You’re spending a large sum of money on something you want to keep around for a while – so getting the extended warranty is a good idea.
The retailer will probably ask you to pay extra for the warranty – but what you may not know is that most card companies include extended warranty policies. These policies cover your purchase for an additional year beyond the manufacturer’s warranty. That’s something you won’t get from a debit card.
Getting the Best Price on an Item
Isn’t it frustrating when you buy something for a good price, only to find it cheaper somewhere else? Some card companies offer price protection, which means they’ll refund you the difference up to a certain amount. So, if you want the best price for an item, use your card next time.
Say you broke down on the road, and you don’t have much cash on you. What will you use to pay the towing company? Your credit card, of course. Even if you can’t pay the balance anytime soon, you may be in luck if you have a credit card with a 0% introductory rate for the first 12 to 18 months. With no interest during this time, it’s the same as using cash – just make sure you pay off the bill during the 0% APR period.
If you’re just starting out with a credit card, earning credit is a must. A solid credit history can open doors to many benefits, like borrowing money for a big purchase like a car or mortgage. You can also get better rates, or even land a job or apartment. When employers and landlords see a good credit score, they’ll know you’re reliable.
Keeping Records of Your Purchases
Probably one of the simplest advantages to using a credit card is one you may overlook – keeping track of your spending. All you need to do is go online, and your monthly statements and transactions are available with a click of the mouse.
With cash, all you have is the receipt. Certainly you don’t want to hoard all that paper – and it’s really easy to misplace them.
Even though debit cards and cash are appropriate for a wide range of situations, there will still be times when you need to use a credit card. Whether it’s protecting your money, earning a credit score, or simply keeping track of your purchases, don’t skip out on a credit card. Your wallet will thank you later.