For a good reason, personal finance professionals spend a lot of time attempting to keep us from using credit cards. As a result, many use a digital credit card unwisely and end up in debt. However, contrary to popular perception, you’re better off paying with a credit card than a debit card and limiting cash transactions to a minimum if you can utilise them responsibly. Let’s look at why your credit card is the best, as well as some credit card uses and methods to employ:
- Bonuses that are only given once
When it comes to getting a new credit card, nothing beats an introductory bonus offer. Applicants with sturdy or excellent credit can frequently be approved for credit cards. They receive bonuses in exchange for spending a specified amount within the first few months of the account’s existence.
You can use other cards that offer bonus reward points or miles for travel, gift cards, products, statement credits, or checks, among other things. A typical debit card that comes with a bank checking account, on the other hand, usually does not come with an initial bonus or recurring opportunities to earn rewards.
- Money Back Guarantee
Discover was the first to introduce the cashback credit card in the United States. The concept was simple: use the card and get 1% of your purchases back in the form of cashback. It has evolved and matured throughout time. Some credit cards now provide 2%, 3%, or even 6% cash back on certain purchases, albeit such enticing offers are subject to quarterly or annual spending restrictions.
- Bonus Points
Credit cards are designed so that cardholders can earn one or more points for every dollar spent. Many reward credit cards offer bonus points for certain purchases, such as restaurants, groceries and gas. Travel, gift cards from stores, and restaurant gift cards can all be redeemed for points—the other items through the credit card company’s online rewards site once certain earnings levels are met. The idea is to choose a card that best fits your spending habits. Changing your purchasing habits to accommodate a specific card can be unproductive.
It’s easier to avoid fraud losses when you pay with a credit card. When a thief uses your debit card, the money immediately disappears from your account. Expenses for which you’ve scheduled online payments or sent checks may bounce, resulting in insufficient funds, fines and a negative impact on your credit, even if the late or missed payments were not your fault. They affect your credit score. It may take time for fraudulent transactions to be reversed and money restored to your account while the bank investigates.
- There Is A Grace Period
When you use a debit card to purchase, your money is immediately deducted from your account. When you buy something through easy credit card payments, the money stays in your checking account until you pay the bill.
Keeping your money for this extra time can benefit you in two ways. First, the minus time value of money will save you money. Deferring payment makes your purchase slightly less expensive than it would be otherwise.