5 Smart Uses for Credit Cards

What's Hot

How to Cut the Cable TV Cord in 2017Family

8 Major Freebies and Discounts You Get With Amazon PrimeSave

Study: People Who Curse Are More HonestFamily

8 Creative Ways to Clear ClutterAround The House

15 Things You Should Always Buy at a Dollar StoreMore

Pay $2 and Get Unlimited Wendy’s Frosty Treats in 2017Family

5 Reasons to Shop for a Home in DecemberFamily

This Free Software Brings Old Laptops Back to LifeMore

Should You Donate to Wreaths Across America? A Lesson in Charitable GivingAround The House

6 Reasons Why Savers Are Sexier Than SpendersCredit & Debt

Resolutions 2017: Save More Money Using 5 Simple TricksCredit & Debt

10 Free Things That Used to Cost MoneyAround The House

7 New Year’s Resolutions to Make With Your KidsFamily

10 Simple Money Moves to Make Before the New YearFamily

The 3 Golden Rules of Lending to Friends and FamilyBorrow

Credit cards have gotten a bad rap, but depending on how they're used, they can be a consumer's friend. Here are some reasons you shouldn't leave home without them.

There always seems to be more bad news circulating about credit cards.

For example, last week Citibank said its credit card default rate was up for the second month in a row – the highest rate among the top six card issuers, according to the AP. Those defaulters are going to take a credit score hit. Meanwhile, Fox Business reported the average APR on credit cards hit a record high of 14.96 percent. So everybody’s facing higher interest rates too.

The news has this on repeat: Credit cards are dangerous. It’s true, but as with many things it applies most to people who don’t know how to correctly use them. When properly managed, using a credit card is often smarter than using debit or cash. In the video below, Money Talks News founder Stacy Johnson talks about why – and we’ve got more info and links on the other side.

How are credit cards smarter than other payment options? Let’s count the ways…

  1. Consumer protections. While credit cards can’t protect you from yourself, they can protect you from shady merchants or bad merchandise. Paying by credit card gives you the option to dispute charges for damaged or defective goods and to enlist your bank to help you settle disputes. The Fair Credit Billing Act also protects you from unauthorized and mistaken charges, which makes credit cards well-suited for online transactions. These protections aren’t perfect, but they’re way better than a long fight on your own over a debit card or cash payment.
  2. Extended warranties. Shop at a big-box electronics store and you’re likely to get the hard-sale on an expensive extended warranty. But if you have a credit card that offers warranty protection, you can comfortably say no, because it may offer an extra year of protection already. Not all cards offer this: Check with your card company or find a card that does. Failing that, read our stories about extended warranties.
  3. Categorized transactions. Again, this isn’t something all credit card statements do, but some organize your spending into handy categories. This can be a big help in budgeting and tax preparation, and a wake-up call if you’re overspending.
  4. Building credit. The most obvious benefit of credit cards is their ability to help build your financial reputation. A good credit score can mean a lower-interest mortgage, lower rates on life insurance and auto loans, and better rates and perks on the cards themselves. You just have to be consistent in making payments on time. 
  5. Freebies. Many cards come with rewards for spending in the form of cash back, frequent flier miles, or points redeemable for gift cards or discounts. Some cards focus on a specific type of bonus, like gas reward cards. Our writer Michael Koretzky pointed out your credit card company can buy your Christmas presents. Check out some of the best credit card sign-up bonuses and the worst reward cards to get a sense of what’s out there.

If credit is suddenly sounding smarter to you, here’s How to Get a Free FICO Score and 3 Tips to Raise Your Credit Score Fast so you can get the best deals on the most promising plastic.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 6 Ways to Make Cheap Foods Taste Delicious

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,894 more deals!