January 15, 2025: If you’re visiting cardsandpoints.com, you are probably already aware that you can earn rewards for using a credit card for your purchases. But there are plenty of additional reasons to use a credit card over a debit card, a check, cash, Apple Pay, Venmo, or PayPal.
Of course, if you’re paying interest on a credit card balance, you probably shouldn’t be putting everything on a credit card, but if you’re able to pay off your credit cards in-full every month, there are several big advantages to using them for every purpose.
Here are seven reasons you should be using a credit card for every purchase.
1. Credit cards have great fraud protections
With a credit card you have built-in fraud protections that are more robust than almost any other payment method.
If someone steals your physical card, the most you can be liable for in the United States is $50. You won’t be liable for any purchases made after your card is reported stolen and most major issuers in the United States offer a zero liability for fraud—meaning that you won’t even have to pay the $50 that you could technically be liable for.
But what if you have physical possession of your card and is someone still steals your credit card number? In this case, you’ll generally have no liability for fraud.
Debit cards also have some measure of fraud protection, but it is much less than credit cards. First, your liability for unauthorized transactions is limited to $50 only if you report your debit card stolen within two days of discovering it is gone. If you report your card after two days, you could be liable for up to $500 of unauthorized transactions.
Additionally, if someone uses your debit card fraudulently, your money could be tied up for weeks while a bank completes its investigation. In contrast, with a credit card, you won’t need to pay for any disputed charge during a bank’s investigation.
2. You can dispute charges if you can’t resolve issues with the merchant
Most of the time, online sellers are honest, packages get delivered, and products work as promised. But most of the time isn’t all of the time. And in the cases where something goes wrong, it can be handy to have the ability to dispute a charge.
Now, you shouldn’t jump straight to disputing a charge if you’re dissatisfied with an item you bought or if a package is late. If something goes wrong, you should always attempt to resolve it with the merchant first. (In fact, your bank will require that you at least attempt to do this.) But when you can’t resolve things with the merchant directly, you can call your credit card issuer and dispute the charge.
Here are some reasons why you might want to dispute a charge after trying to contact the merchant:
- You never received an item you ordered.
- You received an item that was different from the item you ordered.
- You paid for a service that was never delivered.
- A merchant fails to honor its return policy.
- Something you ordered was defective, counterfeit, or fails to perform as advertised.
- You are charged an incorrect amount for an item you ordered.
- A merchant fails to cancel your subscription after you’ve made a request to cancel.
In most cases, you won’t need to pay for the charge or pay interest on the charge while it is in dispute. Typically, you can dispute charges for at least 60 days after they appear on your statement.
3. You can get great consumer insurance protections for free
Many credit cards, including several no-annual-fee cards, offer built-in insurance protections that can protect the things you buy. Benefits vary, but here are some of the most common benefits you’ll find on major credit cards:
If your credit card has a purchase protection benefit, your eligible purchases are protected against damage and theft for a certain amount of time after you buy them. This protection generally lasts 90 to 120 days and you’ll be glad to have it if you trip in the parking lot and drop the new set of wine glasses you just bought less than five minutes prior.
Many cards offer extended warranty protection which will typically give you an extra year of warranty coverage—for free—just for putting your purchase on the card. The value of this protection can be very real if you would otherwise pay for extended warranty coverage on large purchases, and you’ll be thankful you have this protection when your laptop invariably fails 366 days after you bought it.
Some cards offer return protection which can give you a right to return items for up to 90 days, even if the place you bought them won’t take them back. Now you can shop at your favorite store with a stingy return policy with less risk!
Finally, an increasing number of cards offer cell phone protection if you pay your monthly cell phone bill using your card. Benefits vary, but putting your monthly bill on the right card can mean you’re not paying $800 out of pocket if you spider your new iPhone’s screen or if your brand new Samsung phone is stolen.
4. Protect your travel with free travel insurance
Using the right credit card to book your travel can protect you financially against unforeseen circumstances that arise when traveling.
Putting your airline tickets on a card with trip cancellation/interruption insurance could protect you against non-refundable airline fares if you are hospitalized or if you can’t travel for other covered reasons.
If an airline cancels your flight due to weather, they’re usually not going to put you up in a hotel on their dime, but if you book a trip with a credit card offering trip delay protection, your credit card can cover the cost of a hotel night (plus food and other essentials) so that you don’t have to choose between shelling out several hundred dollars and sleeping on the airport floor.
Airlines are pretty reliable about delivering your baggage on-time, but when they don’t you’ll be glad you booked with a card that has baggage delay insurance, which can cover incidentals and clothing expenses you incur when your bag is delayed. And if an airline loses your luggage entirely, lost luggage reimbursement can replace items that an airline refuses to pay for.
Renting a car with a card that has car rental insurance can protect you from liability for damages to a car you’re renting. And if the card offers primary rental car insurance, it will cover you without requiring you to submit a claim to your regular auto insurance.
Finally, many cards offer travel accident insurance that can pay a set benefit should you suffer a loss of life or limb while traveling.
These travel insurance protections are typically a feature of premium travel credit cards with annual fees, but some credit cards with no annual fee do offer some of these benefits.
5. Responsible use of credit cards builds your credit
Using your credit cards responsibly can help you build credit. Now, you may never intend to carry a balance on a credit card (good!) or take out a personal loan, but building a solid credit score can still be helpful.
The most obvious reason you would want a high credit score is if you ever need to finance a large purchase. If you ever might need to buy a car or a house, having solid credit score will help you secure lower-cost financing.
But that’s not the only reason why you might want to build your credit score. Some phone and utility companies require a deposit if you don’t have or have a low credit score. Some apartment managers require a credit report as part of their application process—if your score is low, you might be denied housing or be required to front a larger security deposit. Some jobs even require a credit report as part of their application process.
Here’s how using a credit card for purchases can help you build a solid credit score:
- Build your payment history. The largest component of your FICO score (35%) is your payment history. By using your credit cards and paying them off every month, you can establish a solid history of on-time payments.
- Increase your available credit. 30% of your FICO score comes from the amounts you owe on your credit accounts. And part of this score component is how much you owe, relative to your available credit lines. If you’re using your credit cards, issuers are more likely to increase your credit lines, which will help to increase your score.
- Increase the length of your credit history. 15% of your credit score is your length of your credit history. Keeping a few credit card accounts open builds this component of your credit score over time. Banks will generally close accounts you haven’t used after 18 to 24 months.
6. Credit cards can help you review your spending and budget
While some personal finance gurus will tell you that credit cards will invariably cause your spending to explode and blow your budget, putting all of your spending on a credit card can provide a window into what you are actually spending and where.
Every month, your credit card issuer will generate a monthly statement. This statement isn’t just your credit card bill—it’s a report of all of the spending that you did on that credit card during the month. You can use this monthly statement to review your spending and make sure that you are spending within your budget.
And reviewing your statement can provide a valuable check on impulse purchases that might otherwise fly under the radar. That’s not something you can do with cash.
Many credit card issuers even let you run reports on your spending so that you can see how much you spent in each category. You can compare these reports to your monthly budget to make sure that you have stayed within your budget and use it to proactively adjust your spending next month.
7. Keep your money in your bank account longer
If you use a debit card, money gets drawn out of your bank account when you swipe your card. But if you use a credit card for your purchase, you can hold on to your money for longer—in many cases for a month or more.
When you make a purchase using your credit card, the money doesn’t come out of your account immediately. In fact, your credit card issuer won’t even ask you to pay until your monthly statement closes. And even then, you’ll have at least 21 days after your statement closes to pay interest-free—assuming you’re not carrying a balance month-to-month.
If you’re making a purchase near the beginning of your statement cycle, you could be keeping the money in your account for almost two months, possibly earning a small amount of interest along the way.
Bottom line: Credit cards are a great tool to use for your everyday spending
While we talk mostly about rewards at cardsandpoints.com, there are plenty of other reasons why you should be using a credit card for your everyday spending. Using a credit card for every purchase can protect you against fraud, protect your purchases, pick up the bill when your travel goes awry, and provide a useful budgeting tool. Just be sure to pay your balance in-full each month so that you can avoid paying interest.
