Many people think that they make right financial choices by not using credit cards. In fact, it is quite opposite. Credit cards got their bad reputation because people do not use them the right way. Even though they are called credit cards, they should not be treated as such. They should be used as means of payment replacing cash, checks, and debit cards. They should protect you, give you a peace of mind, or even generate income for you; not put you in debt.
Here are top ten reasons why you should be using your credit cards in place of other means of payment.
10. Fast and easy form of payment. You do not need to handle cash or enter a pin. Currently, many stores do not even require signature for charges up to $50.00.
9. They build up your credit ratings. With use of credit cards, you are charging and paying off thousands of dollars. This way, you are showing that you are a trustworthy customer. (In my lifetime, I owned around sixty credit cards. Some I opened, closed, and reopened. My credit score did not suffer because of that.)
8. No foreign transactions fees. Many major credit cards do not charge these fees. Additionally, credit cards use the interbank exchange rate, usually the best rate you can get for currency exchange.
7. Purchase protection. Your purchases are protected against theft or accidental damage for up to 90 days. For example, currently Master Card covers up to $3000 per purchase and up to 20000 in one year.
6. Extended warranty programs. Your purchase is covered for 12 months after the date your manufacturer warranty expired. As an example, Master Card covers up to $500 per service and up to $2000 per coverage.
5. Travel protection When paying for travel with credit cards, you are a buying peace of mind:
a. Travel cancellation/interruption protections . If your trip was cancelled or interrupted by sickness, severe weather, or other covered situations, you are entitled to be reimbursed for nonrefundable portion of your trip. Some cards would pay up to $15000!
b. Trip delay reimbursement. If your common carrier travel is delayed more than 12 hours or requires an overnight stay, most credit cards will pay for your lodging and meals during that time.
c. Baggage delays insurance. You will be reimbursed for essential purchases like toiletries and clothing.
d. Lost luggage reimbursement. If your checked or carry-on bags are damaged or lost by the carrier, you could be reimbursed for up to $3000.
e. Travel accident insurance. When you pay for your air, bus, train or cruise transportation with your card, you are eligible to receive accidental death or dismemberment coverage of up to $500,000.
f. Auto Rental Collision Damage Waiver is available when you charge the entire rental cost to your card. It provides reimbursement up to the actual cash value of the vehicle for theft and collision damage for most rental cars in the U.S. and abroad.
4. Charges dispute. If your are not satisfied with your product or service, you can dispute charges. I used it many times and won each time. Example: I made a car rental reservation with Avis. When I arrived at the location, it turned out that it was closed for months! I was forced to pick up the car from another location and rent for additional two days to make my travel plans work. Avis promised to reimburse me $250 for these two days. Not only they never did, but they were rude when I tried to get my money back. I turned to my Barclay Arrival Maser Card to dispute charges. I submitted all documentation I have about the case and I won! My charges were removed!
3. No-cost loan. If you need to make a big purchase, you can use 0% APR card and pay off you balance usually within a year.
2. Zero Liability. By law, if your card is stolen or otherwise used without authorization, your are not responsible to pay for these charges. For that reason, banks are closely observing your cards for sings of any fraudulent activity. Debit cards do not offer this level of protection.
1. Financial benefits. You can choose cards that suit your lifestyle and use them towards your financial gain. Every dollar you spend should generate some kind of reward. For example, if you are planning to buy a new GM car, you can open their credit card and get 5% from each purchase towards your new car. My family used this option twice. Once our discount was $5000 and second time $3000. If you are into travel like I am, credit cards give you plenty of options. See my post: How to travel for free. With nothing specific in mind, you can simply get your cash back and enjoy it any way you want.