In the United States in 2017, there were 364 million open credit card accounts.
So many people are already enjoying the benefits from credit cards, but you might be wondering what all the fuss is about.
Are you wondering whether you should use a credit card or debit card? Check out this guide to learn about 6 benefits of credit cards.
1. Better Protection
One of the benefits of having a credit card is that you have protection against losing your money. Buying things with a credit card acts as a buffer for your money.
For example, if you bought things with a debit card and someone stole your debit card information, they could take money straight out of your checking account. You should be able to get back your money, but it may take a little bit longer.
However, if you buy something with a credit card, the thief isn’t really stealing money that’s yours; they are stealing the owner of the credit card company’s. You have more protection this way because they aren’t stealing money directly out of your account.
Your credit card company may also help you detect fraud and argue with charges. Your company may even also help you get your money back if you buy something, but you never received the product or if it was broken or defective.
They have more incentive to help make sure that you are happy with your purchase because it is their money that is being used.
In the event that your credit card is stolen, you should report it to the company as soon as possible. This is why you should always be checking your bank statements or logging to your bank if it’s online.
However, sometimes the credit card company may notice it and notify you.
Fraud is a big concern among credit card companies, so they are motivated to solve it once they notice an issue. Some credit card companies won’t charge you for what the thief spends, but you should check to see what their policy is.
2. Extended Warranties
Depending on what credit cards you have, they may even have the option to attach a warranty, or an extended one, onto whatever you buy.
Some products, like electronics, have a warranty when you buy them, but if you break something after the warranty, your credit card may have you covered if you purchased it with credit instead of debit or cash.
The credit card issuer may reimburse you for the purchase of that item, or they may buy you another product to replace the broken one.
To do this, you will most likely have to submit documentation, like proof of purchase and one of the warranties that came with it. However, you should still check to see if your credit card even offers this option.
One credit card that does offer it is from American Express called the Blue Cash Everyday Card. they will match the length of your warranty and add up to one extra year if you purchased that item with their card.
3. Travel Insurance and Help
If you are a big traveler, you may want to look into getting a credit card to help out with that.
If you book a trip with some credit cards, like the Chase Sapphire, you may even be able to get your money back if something comes up and you can’t make your trip anymore.
That credit card, like some others, comes with travel insurance tacked onto any travel purchases you make with that card. If you don’t have one of these credit cards, most airlines offer you the chance to purchase travel insurance, but it can be an extra added fee to your already expensive flight.
With some credit cards, it comes included with no extra charge. And, if something comes up, you could potentially get all of your money back as well.
Make sure that you check with your credit card company before making a travel purchase.
Not only will you be able to have the travel insurance, but if you have some cards like the Chase Sapphire Reserve, you will have all kinds of insurance to help you on your travels.
You will have insurance that covers:
- Rental car
- Delayed luggage
- Lost luggage
- Trip cancellation or delays
- Trip accidents
- Emergency medical and dental appointments
Sometimes other cards will even insure your phone to make sure you aren’t stranded in a new place without it. For example, the U.S. Bank Visa Platinum offers to protect your cell phone from damage.
However, you will need to be paying that phone bill with that credit card, so this is why it’s always important to check what your bank offers and how you can enjoy the benefits.
Some credit cards will also help you out if you find yourself in a travel emergency.
Some cards that offer this benefit are the Visa Signature and the Visa TravelMoney. If you have their card, then you get access to their Travel and Emergency Assistance Services.
You can use this to get a referral for any legal, medical, or transportation help while on your trip. For these card members, you can access this service any time, anywhere for free.
4. Rewards and Bonuses
Many credit card companies convince you to sign up by offering rewards and bonuses for doing so. This is the main reason most people sign up for one.
Each card offers its own different reward program or bonuses. For example, with the Chase Ink Business Preferred card, when you earn 80,000 points, you can redeem that for $1,000 worth of travel.
Another card, the Citi ThankYou Premier, gives you 60,000 points if you spend at least $4,000 within the first three months of having their card. This equates to $750 you can put towards a flight. This bonus makes it one of the best travel credit cards out there.
5. More Convenient
One of the benefits of credit cards is that they’re just more convenient. Electronic pay has slowly started to replace cash. When you’re paying with a credit card, you don’t have to worry about how much cash you have on you.
It also means that you won’t have to sit down and write a check for whatever you’re purchasing. Even if you don’t have all the money available to buy the item right now, you can still use your credit card as a small loan to be able to buy the item.
Yes, debit cards can be a good convenient alternative to not carrying around cash, but credit cards can be even more convenient than debit cards as well.
Some debit cards have a daily limit on how much you can charge, to protect you against fraud. That means that you may not be able to make big purchases with that card.
Sometimes, if you don’t have enough in your checking account but still buy something with your debit card, you may have to sign for it rather than putting in your pin number. The bank pays what you can’t, but they still act as a creditor, and you will have to pay them back.
At this point, it would be better to have a credit card because you will have so many more fees attached to this than you might have with a standard credit card.
Sometimes life happens, and there is a purchase that you need to buy right away but don’t have the funds for.
Credit cards make that possible. Credit cards are basically like low-cost loans; you can borrow a certain amount of money and pay it back either on time or with a small fee attached.
The best way to handle a credit card is by making sure you have all of your charges paid off by the time they’re due. This will help your credit score in the long run which could also help you get bigger loans.
To boost your good credit history, you can start using your credit card to make most of your purchases, as long as you know that you are going to pay them off on time.
If other lenders see that you have a good credit history, they know that they can trust you and that you will be likely to pay them their money back.
Not only will they be more likely to lend you the money, but they may even offer you a lower interest rate.
On the flip side, if you don’t pay your credit back on time or have other things that affect your low credit score, it may be harder to get a loan. One of the best tips for having good credit with a credit card is to treat it as if it was a debit card.
Don’t buy anything with that card that you can’t actually afford.
Enjoy the Benefits of Credit Cards Today
These are only some of the benefits of credit cards; there are so many more.
There are all kinds of different credit cards out there, so you should make sure you research the card before you sign up for it.
To start looking for the best credit cards, use this search engine.