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Why you should be using your credit card

Online Shopping. Happy Muslim Couple Using Digital Tablet And Credit Card Buying And Purchasing Things Sitting On Sofa At Home. Joyful Customers, Modern Shopping And Sales Concept
Prostock-studio / Shutterstock

Credit cards aren’t just convenient to use — there are plenty of other rewarding reasons to pay with plastic.

They’re safer to carry around

Americans say they can carry just up to $66 in cash on average without fearing for their safety and 24% of them believe using credit or debit is less risky than using bills, according to the Travis Credit Union study.

When someone steals bills from your wallet, you’ll probably never get that lost money back.

But if you report a stolen credit card to your bank promptly before any fraudulent charges appear on your account, you won’t be liable for those unauthorized purchases.

Luckily, there are plenty of ways to protect against credit card fraud such as checking your account regularly and paying with a virtual card that hides your real credit card information.

You can earn cashback and rewards

Unlike debit cards and cash, credit cards can offer cash back and redeemable points to consumers who use them.

Some let you rake in the rewards when you shop at select stores and others can earn you points you can redeem when you travel.

It’s important to pick the right credit card for your lifestyle, so do some comparison shopping first.

You can track your spending

Woman is holding credit card and using laptop computer. Online shopping concept. Close up.
Yuganov Konstantin / Shutterstock

If you’re trying to stick to a budget and assess where your money’s going each month, just check your monthly credit card statement or pop into your account online.

This can be super helpful when it comes to catching recurring bills from services you’re no longer using, or when you misplace a receipt and want to double check how much you actually spent on groceries.

You can build your credit history

It’s important to keep your card active by regularly using it and building your payment history — it’s one of the factors that affect your credit score.

Lenders and creditors pull up your credit score to assess whether you’re a reliable borrower when you apply for loans and credit products and determine your rates.

Just make sure you’re using your card responsibly and paying off your balances in full each month.

You might get some warranty and purchase protection

Some credit cards come with extra perks, like extending your warranty or covering theft or damage on electronics and other big purchases.

Extended warranty protection lets you lengthen your coverage time under the original manufacturer’s policy on purchases made with that credit card.

Just make sure you check what exclusions apply and the amount of coverage you’re getting.

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When you shouldn’t use your credit card

Top view of stressed young Asian man putting hands on head trying to find money to pay credit card debt
Hananeko_Studio / Shutterstock

Although you should be using your credit card regularly, there are some instances when you want to avoid relying on it too much.

If you’re struggling to pay off your balances each month, hold off on using your card as much as you can and opt for your debit card instead.

If you’ve got debt from multiple cards, consider rolling them into a consolidation loan to make paying them off easier.

You also shouldn’t pull out your card when you haven’t kept track of your balance — you risk maxing out your card and hurting your credit score.

And beware of big purchases that include third-party fees. For example, if you choose to pay your tax bill with a credit card you could end up paying processing fees that can tack on an extra 1.99%.

Ways to free up extra money to pay off those cards

Close up of people hand work calculator and money,coins in finance banking and  saving concept
Pru Studio / Shutterstock

If you’re worried about pulling together the funds to pay off your credit card bill next month, here are some ways to help boost your income.

Slash your insurance rates. You don’t need to stick with your old, pricey premiums. Do some comparison shopping to find lower rates on your homeowners insurance or car insurance and cut down on your monthly payments.

Invest your pocket change. You don’t need to spend big to invest in the stock market. Download a popular app app that collects your leftover cash from everyday purchases and grows it by placing it into an automated portfolio.

Find better deals online. Planning a big purchase or need to buy some household necessities online? Save money with a free browser extension that will look for the best deals and coupons.

Sell your old stuff. Clean out your closet and get some extra cash by selling your unused gadgets and books online. You could get paid up to 33% more than you would selling you stuff on other sites.


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Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.

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