07 Reasons to Use Your Credit Card Read details By Credit Card.

Credit Card Use Responsible:

Personal finance experts spend a lot of energy trying to prevent us from using credit cards—and with good reason. Many of us abuse them and end up in debt. However, contrary to popular belief, if you can use the plastic responsibly, you're actually much better off paying with a credit card than with a debit card and keeping cash transactions to a minimum. Let's examine why your trusty credit card comes out on top.

Building Credit

If you have no credit or are trying to improve your credit score, using a credit card responsibly will help because credit card companies will report your payment activity to the credit bureaus. Debit card use doesn't appear anywhere on your credit report, however, so it can't help you build or improve your credit.


Most credit cards automatically come with a plethora of consumer protections that people don't even realize they have, such as rental car insurance, travel insurance, and product warranties that may exceed the manufacturer's warranty.

Cash Back

The cash back credit card was first popularized in the United States by Discover, and the idea was simple: Use the card and get 1% of your balance refunded regardless of what you bought or where you bought it. Today, the concept has grown and matured. Now, some cards now offer 2%, 3% or even as much as 6% back on selected purchases.

Some cards, like the Fidelity Rewards card, offer a higher rate of cash back rewards but you must deposit your cash directly into an investment account.

Frequent-Flyer Miles

This perk predates almost all the rest. Back in the early 1980s, American Airlines, followed closely by United Airlines and US Airways (now merged with American), began offering the chance to earn frequent-flyer miles via an affiliated credit card. Now, it seems like every airline has at least one credit card available.

Cardholders rack up miles at a rate of one mile per dollar spent, or sometimes one mile per two dollars spent. How valuable this reward actually is depends on the type of airline ticket you purchase with your points. Many frequent flyer cards are made immensely more valuable by their mileage signup bonuses. These are often enough to put you 50-100% of the way toward a free flight within a month or two.


Paying with a credit card makes it easier to avoid losses from fraud. When your debit card is used by a thief, the money is missing from your account instantly. Legitimate expenses for which you've scheduled online payments or mailed checks may bounce, triggering insufficient funds fees and making your creditors unhappy. Even if not your fault, these late or missed payments can also lower your credit score. It can take a while for the fraudulent transactions to be reversed and the money restored to your account while the bank investigates.

By contrast, when your credit card is used fraudulently, you aren't out any money – you just notify your credit card company of the fraud and don't pay for the transactions you didn't make while the credit card company resolves the matter.

Signup Bonuses

There's nothing like a welcome-aboard perk. Applicants with good credit can get approved for credit cards that offer signup bonuses worth anywhere from $50 to $250 (and sometimes even more). Other cards thank newcomers by bestowing on them a large number of reward points that can be redeemed for fun stuff (more on those below). In contrast, a standard debit card that comes with a bank account offers zero money or very small rewards.

Rewards and Points

Many card rewards work on a point system where you earn up to five points per dollar spent. Often companies will offer special three-month promo periods where spending in a certain category, like restaurants or transportation, nets you double or triple the usual amount of points. When you reach a certain point threshold, you can redeem your points for gift cards at some stores, or buy items outright from the credit card company's "rewards catalog."

Your credit card rewards options are almost endless. Get a co-branded card issued by a gas station chain, a hotel chain, a clothing store or even a nonprofit organization like AAA and your rewards may increase even faster. The trick is to find the card that best fits with your spending patterns. Doing the inverse – altering your spending patterns to fit with a particular card – is foolish. But if you're already spending a few days a month patronizing a particular hotel or airline, why not use the card that will encourage your continued patronage by offering you discounts?

There are several benefits to paying with credit instead of debit, if you use a credit card responsibly.For starters, credit cards offer sign-up bonuses that debit cards don’t. Those bonuses can be worth hundreds of dollars. Sometimes, credit cards offer cash back, anywhere from 1 to 5 percent.\nMost airlines offer a credit card that lets holders rack up miles for every dollar they spend. Many frequent flyer cards offer sign-up bonuses that can put cardholders on a free flight within a couple of months.\nMany cards give points for every dollar spent, and once a certain threshold is reached, cardholders can redeem points for gift cards.\nCredit cards can be safer because they make it easier to avoid losses from fraud. If your debit card is used fraudulently, the money disappears from your account right away. If someone illegally uses your credit card, you can notify the company and resolve the matter.\nCredit card purchases don’t remove money from your bank account until you pay your monthly bill. Debit card charges immediately deduct your money. So using a credit card lets you hold onto your money longer, potentially earning interest. It also spares you the headache of worrying about your balance with each charge.\nMost credit cards come with insurance for things like travel and product warranties.\nSome items are tough to buy with a debit card. For example, paying for hotel rooms and rental cars on a debit card sometimes requires holds of several hundreds of dollars, just in case of damages.\nAnd using a credit card responsibly can improve your credit score. Debit cards don’t appear on a credit report.


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