While sure, you should only charge what you can afford, otherwise you could be looking at years of trying to repay the credit card debt that you have racked up, but if used responsibly, credit cards can actually be of use, one that could be argued to be used not only for some purchases, but all. For those with spending issues, the debit card may be more suited as it takes purchases directly from the bank account, this way, you can only spend what you have, and once the money is out it’s out until next paycheck. With a credit card you can essentially keep charging until you hit the limit, but for those that can handle a credit card appropriately, they actually can provide many benefits, which makes it important to chose the right card, with so many out there that are looking for your business.
You could argue that a debit card is accepted everywhere too, and that may be true, but when you try to book a hotel room or rental car, using a debit card can put a significant hold on your account that will tie up a sizable amount of money until the hold lift comes off, which could take a week or two. With a credit card, even if there is a hold, you won’t have to worry about those funds affecting your account, as they would stay ‘pending’ until lifted anyways.
These days you just never know who could be going after your information. You could be pumping gas and swiping your card, or even leaving it out too long when signing for your restaurant or bar tab, with a quick snap of a picture of your card and you could have fraudulent charges start to show up that night. While you can dispute on a debit card as well, any fraudulent charges would have been taken out of your bank account, so at least with a credit card you can dispute all of the charges without worry about losing any money.
Builds Up Credit
If you have applied for a mortgage, loan, or credit card, you know that your credit score factors in for not only your entire approval, but sets your interest rate, which the higher the rate, the more you pay each month, so it makes it all more important to strive for the best rate you can. By using your credit card to make purchases and then paying off the next month, on time, you are establishing a solid payment history and also keeping your credit utilization low, which both are important factors in your credit score.
Watch the Rewards Add Up
Probably the best reason to use a credit card for all purchases, and my favorite, is for the rewards. By making charges on your card, you can earn points to redeem for gift cards, miles, hotels, or even cashback to you each year. Once you see the rewards start to add up it can be easy to want to put additional charges “for the rewards”, but if you’re not able to payoff the full statement balance by the due date anyways, interest will start to kick in and those charges could outweigh anything you’d earn in rewards anyways. So, if you can just think of it as earning free money on the purchases that you would be making anyways, you can see the savings start to add up quickly.
Spending Grace Period
While it may have its pros and cons, using a credit card instead of a debit card will allow you to charge throughout the month and not have to pay back until next month, after you’ve had a paycheck or two come in to be able to pay the balance back. On the other hand, with a debit, you can only spend what you can afford, so making it all more reason to track your purchases with a credit card and make sure not only with your credit card spending, but your overall finances still continue to have more money coming in than going out.
Sure, there are concert presales that your credit card may have first dibs on, which can be good for a popular event that will sell out quickly, one perk that I had no idea was available from my credit card was when my rental car had damage done, out of my control, and I was left with the bill, since I did decline insurance. What I found out though, is because I used a credit card that had insurance on it, they covered the difference!