Ask an Expert: Why Should I Use Credit Cards When Cash or Debit Will Do?

This reader has credit cards, but is reluctant to use them – after all, aren't they bad? As it turns out, no. In fact, they can be a consumer's best friend.

Ask an Expert: Why Should I Use Credit Cards When Cash or Debit Will Do? Photo (cc) by

This post was written by Logan Abbott. Logan is the editor of the credit cards section of

A Money Talks News reader recently wrote me with this question:

I have a couple of credit cards, but I prefer to pay cash, or use my debit card to make most purchases because I’m afraid of becoming reliant on my credit card and racking up debt. When does it make overwhelming sense to use my credit card instead of cash or my debit card?

My response

First I’d like to address why you don’t like using credit cards.

While it’s true that tons of people overuse their credit cards and end up with significant debt, that’s not what happens to most people, including you. The rule is simple: Only use a credit card for purchases you know you could pay cash for. In other words, if you’re using credit because you don’t have the money, you’re on the road to ruin. But if you can pay it in full when the bill comes, there’s no need to worry.

In fact, if you maintain a budget and are careful with your credit cards, they’re not only not evil – plastic is your friend.

Here are four situations where using a credit card to make a purchase instead of cash or a debit card is smart – provided you can pay the bill.

Purchase protection

Many credit cards – like American Express and Visa Signature – offer quality purchase protection on most things you buy. Big expenses or items with a risk of being damaged or stolen are great things to buy with credit cards. The Citi Hilton HHonors Visa Signature Card offers lost luggage reimbursement, travel accident insurance, emergency assistance services, and a host of other protections on purchases made with the card. Just be sure to read your card’s terms before assuming purchases are covered.

Untrusted, overseas, or unknown merchants

If you’re making a purchase from an online store, unknown person, overseas merchant, or unknown service company, you should always use a credit card. While your debit card or bank might refund your money in case of fraud, your credit card company will allow you to quickly and easily dispute nearly any charge. And while the dispute is being resolved, your money won’t be tied up.


If you have decent credit, you can apply for credit cards offering solid rewards. For example, the British Airways Visa Signature Card offers 1.25 Avios points for every dollar spent on purchases, redeemable for free flights on British Airlines and partner airlines in the United States. In addition, the card also offers 50,000 Avios points just for making $1,000 in purchases during the first three months you have the card, and an additional 25,000 Avios points for spending $10,000 on purchases in the first year that you have the card.

If you were to use cash to pay for a purchase instead of a credit card, you’d be missing out on a host of great rewards such as miles and rewards points that can be redeemed for free flights, hotel stays, merchandise, and more, or cash back.


Credit cards should never be used because you’re spending more than you’re making. But things can happen that are out of your control. If you find yourself with a genuine emergency, having a credit card with a low – even 0 percent – interest rate can be an instant source of cheap cash.

For example, the Discover it Card offers a 0 percent introductory APR on purchases for 18 months. Help like that would certainly come in handy should the need arise – especially if the alternative is to apply for a loan, wait for approval, then pay whatever interest was required for access to cash.

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Note: While we attempt to be completely objective when reporting on credit cards, this site may be compensated by issuers when a reader applies for a credit card through the links within credit card stories or on our credit card search page.

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