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Smart Reasons to Use a Credit Card for All Purchases

Now seeing the title of the article to use your credit card for every purchase could scare some, especially if you have had credit card issues in the past or maybe don’t trust yourself with keeping spending under control.  With the credit limit so high, you have virtually and endless amount of room to spend, so unless you have some self-discipline when it comes to spending, you could find yourself in a mound of debt.  It’s important to be able to pay the full statement balance by the due date, otherwise carrying over a balance will then start accruing interest that you will begin to pay, and depending on the balance and APR of the card, could add a significant amount to your balance that may take a while to pay off.

Fraud Protection

There are so many occurrences of fraud these days, whether it is taking your information at the gas pump, while your card is out in the open, or having your information compromised as part of a large security breach.  What I’ve learned that it’s better to happen on your credit card instead of a debit card, because at least with a credit card you can dispute and the charges will be pending until cleared up, and you will not have to worry about paying, while with a debit card, the charges will have already have left your bank account and you are stuck waiting to try and get the charges back.

Able to Dispute When Necessary

Speaking of disputing fraudulent charges, your credit card perks for protection do not stop there.  The great thing about a credit card too is that you can dispute questionable work, or lack of completing a job, so that you can dispute the charges and the other end will have to fight to prove they are in the right.  With a debit card you would have already have paid the money, so good luck trying to get paid back after the money has already left your account and into theirs.

Continues to Build Credit

While carrying a balance will not help your credit, in fact it can lower it because it reduces your available credit and increases your credit utilization, but responsible use can improve your score.  Payment history is a large portion of your score, so consistent on-time payments will help you.  By paying off the full statement balance each time you will avoid interest, but you can also be granted credit line increases, which can actually help your score in the mean time because that will increase your available credit and decrease your credit utilization, so it’s ok to accept any offer to increase your line.

Easy to Track Spending

When it comes to saving a few dollars every month, trying to reduce unnecessary spending is a great place to start, and if you are using your credit card for every purchase, then pulling last month’s credit card account statement will be a great way to look line by line and where your money is going.  For fun, try circling and adding up what you probably could have gone without and see what that total is.  If you can remove unnecessary spending in places like going out to eat instead of grocery shopping, you can probably save hundreds of dollars a month and put that money towards more important areas such as staying out of debt, building an emergency fund, and saving for your future.

Extra Coverage

It wasn’t until someone hit my rental card that I knew that credit cards offered rental car insurance, which was great considering I declined the rental coverage from the rental company when I signed the agreement.  Extra coverage perks like that may not be well known, but credit cards can also offer coverage for lost or stolen items that were purchased with that credit card, so it’s a good idea to check the fine print in your agreement and see what is covered and what coverages that you might have missed.

Rewards are the Best

Probably the best reason to use a credit card for every purchase is seeing the rewards add up.  These can be in the form of airline miles, points to redeem gift cards, over even dollars where you get a check each month.  By using your debit card to make these purchases, you would be leaving this free money on the table that you can earn just by making the purchases that you were going to make anyways, so it makes sense, as long as you can be mindful of how much you are spending.

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