8 Reasons Why You Should Use a Credit Card

by John Kiernan on May 13, 2011

New Credit CardsThroughout the financially tumultuous past few years, the credit card industry has been the subject of a great deal of attention in the press, Congress and the court of public opinion. The system admittedly was broken. Shady credit card companies, hiding behind a conspicuous lack of transparency, were using bait-and-switch tactics and confusing policies to take advantage of their customers. Now that the Credit CARD Act of 2009 has eliminated most of these issues, we can again being to appreciate just how useful credit cards can be. So, without further ado, 8 reasons why you should use a credit card as long as you trust yourself to spend wisely.

1. Credit building

Having a solid credit history is necessary to garner approval for a loan, get a mortgage, buy or lease a car, or be seriously considered for some jobs. Use of a credit card is unquestionably the easiest, least expensive, and most efficient way to build credit. Why? Well, because credit card usage information gets sent to your major credit reports each month, thereby allowing a lot of information about your fiscal responsibility to compile quickly. Interestingly, since this information reflects both what you do and don’t do with a credit card, actually making purchases isn’t even necessary to build credit. Simply by maintaining a card in good standing and at zero balance, you’ll be viewed as a responsible consumer.

2. Rewards

Wouldn’t it be great if you automatically saved 1-5% and were given free stuff every time you paid for something with cash? Obviously, but you aren’t. You do receive such perks when using rewards credit cards, however. Whether you want discounted gas, VIP treatment in airports and hotels, free vacations or just some extra cash in your pocket, one of the best parts of using a credit card is the rewards you can get.

3. Convenience

You don’t want to always carry around a lot of cash or your checkbook. That would be both dangerous and burdensome. You don’t want to wait for payday every time you want to buy something. That would be impractical. A credit card simply makes paying for goods and services easier.

4. Time

Time is one key thing credit cards provide that many other spending vehicles do not. Unlike with cash, debit cards, prepaid cards and checks, when it comes to credit cards, you don’t have any personal outlay of money immediately upon making a purchase. Instead, you receive a statement of your purchases at the end of each billing period, which you have at least 21 days to pay. This buffer comes in handy in many different cases, perhaps most as it relates to fraud. If your debit card is stolen, for example, you might not notice the missing funds before mailing your monthly checks to your mortgage company, kids’ school, etc. If these checks bounce, you’ve got a bigger mess on your hands than simply recovering the stolen money. With a credit card, such a trickle-down effect of damage is far less likely because you have significant time to both notice and sort out any irregularities before you have to make a payment.

5. Fraud protection

All of the credit cards on the market today have what’s known as $0 liability, which means if unauthorized purchases are charged on your account for any reason, including your card getting lost or stolen, you won’t be out any money. What kind of fraud protection does cash give you?

6. Saving on interest

For most of us, there comes a time when—for whatever reason—we cannot pay our bills in full by the end of the month. 0% credit cards give us the ability to pay down these bills interest-free for as long as 21 months.

7. Unique business utility

So-called business credit cards allow small business owners to easily track company spending, provide employees cards with customizable limits, and earn rewards on their spending. Many rewards business credit cards also provide users discounts at office supply stores, mailing services and access to offices in cities around the world.

8. Exchange rates

When traveling abroad, why worry about finding the best exchange rate or converting just the right amount of money when Visa and MasterCard provide some of the lowest exchange rates possible? Using your credit card abroad will save you time, money and hassle; just make sure to get a credit card with no foreign exchange fees because, according to the Pew Charitable Trusts, 91% of bank cards charge 3% fees for transactions processed outside the U.S.

[Disclosure: Some of the links within this article point to CardHub.com, which is owned by the same parent company as Wallet Blog.]


Capital Gold
Easy to carry, time saving, safety,
Capital Gold
July 1 at 07:46 am
I must prefer to use my credit card, because it is more convenient. I am not a kind of person who will carry more cash in my wallet. After I lost my wallet years ago, with cash and important cards, that's why now I am more careful in terms of carrying more cash in my wallets or important things.
May 17 at 21:46 pm

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