10 Reasons to Use Your Credit Card

Use your credit card responsibly and enjoy benefits that will help you build your wealth. Experts only advise against it if you abuse your plastic and end up in debt. But if you are a mindful spender, you can certainly take advantage of the nice perks below that come with using your credit card.

1. Signup bonuses

Just for signing up, your credit card company can hand you a welcome bonus starting from $50 or give you a large number of reward points. In contrast, you earn zero money or rewards when you sign up for a debit card.

2. Rewards and points

Each card has a reward system where you earn points for a certain amount of dollars spent. When you reach a certain point threshold, you can redeem your rewards for fun stuff like gift cards, specific items from your credit card company’s rewards catalog, gas, flights, or hotel stays. Use your credit card often and your rewards options are almost endless.

3. Cashback

Use your credit card and get 1% of your balance refunded regardless of what you bought or where you bought it. These days you can find cards that offer cashback up to 6% on selected purchases.

4. Frequent-flyer miles

Get the right credit card and you will be able to support your travel addiction quite well. You can earn frequent-flyer miles at a rate of one mile per dollar spent. Even better, find a frequent-flyer card that offers a handsome mileage signup bonus. Within a month or two, you can be on your way towards a free flight.

5. Safety

When your credit card is used fraudulently, you do not lose money instantly. Just notify your credit card company of the fraud and they will help you resolve the matter. In contrast, you are automatically at a loss with a debit card. The money goes missing instantly.

6. Keeps vendors honest

Use your credit card to pay for big-ticket items. For example, if you hire a tile setter to set your flooring but he ends up making a mess, you have not lost money yet and you can resolve the issue with your tile setter and the card issuer. If you paid with cash, your money is gone. Even if you can dispute it at the state licensing board, the process can take months and there is no guarantee you will get your money back.

7. Grace period

Every time you make a purchase, the money stays in your checking account until you pay your credit card bill. The time value of money adds to wealth. Also, when you always pay with a credit card, you do not have to watch your bank account balance as closely.

8. Insurance

Choose the right credit card and receive extra perks like rental car insurance, travel insurance, and extended product warranties.

9. Universal acceptance

Merchants and vendors prefer customers to pay via credit card. It is always easier to make changes compared to a debit card.

10. Building credit

Use your credit card responsibly and it will improve your credit score. Debit card usage does not appear anywhere so it will not help you build any credit. This does not mean it is always best to pay with a credit card though. There are just certain benefits that will definitely help you manage your money better.