Seeing that I ended up bankrupt partly BECAUSE of irresponsible credit card usage, you might be wondering how I could ever advocate credit cards again.
The truth is, when used wisely, credit cards offer several advantages.
Using a credit card for every purchase might scare you, especially if you’ve had credit card issues in the past.
Or perhaps you don’t trust yourself with keeping your spending under control.
For starters, if you’re going to use credit cards, you must to be able to pay the full statement balance by the due date. In full.
Yes, there are exceptions to this rule when you’re rebuilding credit, but that’s a topic of a different post.
Here are smart reasons to use credit cards:
It’s better to have someone unlawfully charging your credit card as opposed to a debit card.
With a credit card you can dispute the unauthorized transactions while the charges are pending.
With a debit card, the money has already have left your bank account and you now need to try to get that money back from the bank.
Good luck with that.
Ability to Dispute When Needed
A credit card allows you to dispute questionable services and, more often than not, I find the credit card company siding with the customer.
I’ve been on both sides of this coin and can attest that with credit cards, for better or for worse, the customer is almost always right.
With debit cards, the money is already gone and into their account. Good luck trying to recoup it.
Credit cards are awesome to rebuild credit after you destroy it. I know.
Use a credit card sparingly and pay it down every month. It’ll show you’re responsible and your credit goes up.
Extra Coverage (Car Rentals, Stolen Items)
Car rental coverage is a great perk of credit cards. No more needing to succumb to the rental car attendant scaring the crap out of you when you’re renting a vehicle. “If you get into an accident, we will come after you first born, your cat…”.
Credit cards may also cover lost or stolen items that were purchased with that card.
And – cue the drums – the best reason to use credit cards: the rewards. These can come in the form of airline miles, hotel points, gift cards, etc.
Every time you make a purchase, you earn points towards something.
I paid for everything with a debit card for many years before I was approved for a credit card. I left soooo much money on the table.
Now I charge everything to my card, pay it in full at the end of the month and then take my family to exotic locales with the points accrued.
There you go. If you can control yourself with your spending and are able to pay off your credit card charges every month, there’s no reason why you shouldn’t have a credit card.
Trusting you to do the right thing,