Good Reasons to Use Credit Cards

Thought you'd never read that title here, huh? ;-)

Actually, I'm not anti-credit card. I'm anti-debt and anti-not paying off your credit card bill every month. But as far as cards themselves go, I'm fine with them. I use two of them to make money and save money, buy stuff only in my budget, and pay them off every month. What's not to love?

Here's a piece from Money Central that agrees with me. It lists reasons it's good to use a credit card including:

You usually get far more purchase protection with a credit card than you do with cash or check. That helps when you buy a $1,000 laptop that suddenly has a damaged screen a week after you walk out of the store, particularly if the store manager and the manufacturer insist it's your fault.

Save-the-day features kick in when you travel. Credit cards often include free car-rental insurance and some travel insurance, though offers vary with each issuer.

And if a thief picks your pocket, your liability is much lower than with a wad of cash.

Add in airline miles, rewards points and cash back, along with the interest-free loan if you pay the balance every month, and you'll find a lot of credit card experts using their cards to charge everything they can.

Of course, this assumes you have enough self-control not to spend like a wild banchee, run up enormous bills, and end up paying off that $1,000 shopping spree for the next eight years. Unfortunately, many people can't resist these temptations, and for them it's probably better NOT to have a credit card. For the rest of us, though, it's not only fine to have one but probably a good idea. Use it well, make yourself some money (or get other benefits), and enjoy life a bit more. ;-)

For more on this issue, see these posts:

• How to Maximize Credit Card Rewards (And Why Cash-Back Cards are the Best for Most People)

• Best of Free Money Finance: Credit Card Posts

• Best of Free Money Finance: Debt Posts

Comments

[Larry Nusbaum]

Probably better never to have credit cards in the first place, as too many are just not disciplined in their financial lives?

[Blaine Moore (First Time Homeowner)]

That is how I use my cards. Charge whatever I can, get the points towards cash or towards my auto insurance, and then pay the balance every month.

I basically treat my credit cards like debit cards; if I don't have the cash available in the checking account, then the money doesn't get spent on the credit card until I do. Any balance throughout the month that appears on the credit card is deducted from the available cash I consider myself to have available in my checking account.

Most times I will physically have 4-10 times more money in my checking account than I consider to actually be there, since that money will usually already be accounted for even if it isn't spent yet.

[Chuck]

Maybe I'm just more disciplined than most people out there but I think its absolutely crazy not to take advantage of what a credit card offers you. For most purchases I get 1-5% cash back, 2x the warranty period, a 0% loan until the end of the billing period, and a nice breakdown of everything I've spent for the month in one place.

I guess I just don't understand how people can be so irresponsible that the credit card burns a hole in their pocket and end up spending themselves into debt that they would do without one.

[AuntJessica]

That is how I use my credit cards too, but one reason that you didn't mentiono is that if they are used correctly they build you up credit score.