Credit cards may not be the best option for all purchases. Still, there are examples when they make sense since they safeguard you from fraud and unethical business practices while allowing you to earn points with every swipe. But, of course, you must also utilize credit to establish credit.
Here are five everyday purchases that you should use credit cards for:-
Expensive consumer goods:
If a product is pricey, it should probably be purchased with a credit card. Over cash and debit cards as credit cards have a significant advantage that whenever you are using your credit card to pay, you’re usually covered for 90 to 120 days from the date of purchase against damage, theft, or loss of the item.
Also, there is Purchase protection, a card perk that functions as a short-term kind of insurance for products purchased with your credit card. For example, if you buy a new computer and it breaks a few weeks later, your credit card’s purchase protection will cover the cost of repairs, letting you in for safer, more beneficial usage. When you compare credit cards to any other form of payment, you will see that most credit cards include this benefit while other forms of payment don’t. Again, it’s a little-known card feature that can save you hundreds of dollars when you need it.
Buying online often means working with sellers and merchants we are unaware of. Still, there is also an advantage that buying something online with a credit card gives you better protection against sellers who fail to meet your credit demands. In addition, cards offer better protection against chargebacks.
However, there is more to it than the chargeback protection. Many credit cards tend to include “return protection,” which lets you file a claim if a retailer refuses to let you return an item for a refund of the purchase price. Return protection effectively increases the time you have to return something you’ve bought. For example, suppose you cannot return an item under a merchant’s 10-day return policy. In that case, you may be able to file a claim with your credit card company for a refund by shipping the item to the card company within 60 days of purchase.
When you use your credit card to purchase at a gas station, many cards provide generous benefits. However, gas stations installing chip readers at the pumps have become the primary hotspot for card theft, making them one of the few remaining places for thieves to collect card numbers and close their pockets by emptying card fill counts.
Looking towards all such threats, credit cards provide better fraud protection when we compare credit cards to debit cards, limiting the risk of the cardholder. Conversely, debit cards can be responsible for extensive losses if the fraudulent behavior is not reported within two days. In addition, they can take overall responsibility for fraudulent payments if not reported within two months.
Suppose you are planning to go out to eat. In that case, there’s a good reason to pay the amount of the purchase by your credit card, including that many credit cards provide double or triple gains on restaurant expenditures, with other cards offering seasonal cashback bonuses of up to 5%. In many states, earning 5% cash back on restaurant purchases is the equivalent of getting a sales tax rebate which counts as a huge advantage!
Travel (airfare, hotels, rental cars)
Credit cards are an easy go-to payment method for various reasons when it comes to travel purchases. To begin with, most hotel chains and vehicle rental firms prefer credit card payment, with some organizations explicitly prohibiting or making it more difficult to pay with cash or debit. Also, while renting a car, you should try to pay the amount using a credit card because most of them come with complimentary insurance against vehicle damage.
Also, the benefits you can receive on travel purchases are usually higher than those you may earn on other means of purchase. For example, the most acceptable travel cards reward you with additional points for your travel spending, which may be used as a rebate on your purchases.
Credit cards also provide insurance if your flight is canceled or delayed or if your luggage does not arrive at your destination promptly. A typical bonus on travel-focused credit cards is free trip protection and baggage delay insurance, which can make life much easier if your journey is canceled or delayed or if your luggage is misplaced along the way.
If you’ve only used credit cards sporadically, you should remember to use your credit card properly by following these guidelines; you should maintain a 30% or less credit utilization percentage. Also, avoid buying goods you can’t afford; credit cards simplify spending beyond your means, but this isn’t a long-term solution. Instead, just charge only what you can afford to pay back comfortably at the end of the month.