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8 Reasons To Use Your Credit Card
Posted By Ron On January 27, 2012 @ 5:00 PM In Credit,Personal Finance | Comments Disabled
Since I started this blog in 2007, I’ve spend a lot of time and energy writing about the dangers of irresponsible credit card  use. I fought many personal battles with those little pieces of plastic and while I’m still wary (with good reason), credit CAN be used responsibly. In many cases, you may actually be better off paying with credit over debit . There are a lot of ways that credit cards  come out on top.
If you sign up for the right card, you can earn anywhere from 1-5% back on your purchases. Best choice in my opinion? The Discover More Card .
Virtually every airline has at least one credit card. Cardholders can rack up frequent flyer miles at varying rates. Many, like the Southwest Airlines Rapid Rewards® Card from Chase  offer a substantial signup bonus to get you started on your way to a free airline ticket. The Southwest card even gives you a birthday present of 3,000 bonus miles each year on your birthday – equal to $50 towards their Wanna-Get-Away Fare.
Many card rewards work on a point system where you earn points per dollar spent. When you reach a certain point threshold, you can redeem your points for gifts , travel , hotels, or something from their catalog. A good choice in my opinion is the American Express Premier Rewards Gold Card .
Paying with credit cards  can make it easier to avoid fraud. When your debit card is used fraudulently, the money is missing from your account instantly and may take a while to get back unless you deal with a very reputable bank like PerkStreet. Any scheduled payments or checks may bounce, causing NSF’s and making your creditors (and you) very unhappy.
When you make a purchase with your debit card , your money is gone instantly. When you make a credit card  purchase, your money stays in your checking account  until you pay your credit card bill (hopefully in full). There are two advantages: one, if you pay your credit card from an interest bearing checking account  and earn interest on your money during the grace period, the extra interest is yours to keep. Two, when you pay with your card, you don’t have to watch your bank account  every day to make sure you’re not overdrawn.
Most credit cards  automatically come with a host of consumer protections that you may not realize you have, such as rental car insurance , travel  insurance, and product warranties that may exceed the manufacturer’s warranty.
Despite television and radio guru claims, certain purchases ARE more difficult to make with a debit card . Try renting a car or booking a hotel room and you’ll almost always have an easier time with a credit card. Rental car and hotel companies prefer credit cards  because it’s easier to charge customers for damages to a car or a room with a credit card. Using a debit card  may result in the company putting a hold of several hundred dollars against your checking account  to cover those just-in-case events. Also, when traveling in a foreign country, many merchants won’t accept your debit card, even when it has a bank or credit card company logo on it.
If you have no credit or if you’re trying to improve a poor credit score , using a credit card responsibly will help build your credit score  because credit issuers report your payment activity to the credit bureaus. Debit card use doesn’t appear anywhere on your credit report. You can find some great choices for those needing to rebuild their credit on my Credit Card Information  page.
Not everything is rainbows, unicorns, butterflies, and sunshine in credit card land. There are fees, there is the potential for late charges, there is the potential for interest charges if you don’t pay your balance in full each month. Many of us abuse them and end up in high interest debt then fight for years to get out of it.
But if you can manage yourself and use your card responsibly (aka like an adult), there are a lot of benefits to using your credit card.
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