Owning a credit card is a big responsibly that can sometimes be confusing for those with little experience. There are several situations where credit is a great option, but there are many in which it may hurt you in the long run. Here are some of the best times to use plastic when you want to get the most in return.
If you have a rewards card, it may be beneficial to use your credit card even when cash or debit are available options. Using your card when possible will help your reward total add up more quickly. Only use your card responsibly when you are fully capable of paying the charge.
If you need to build or repair your credit, using your card at these times is a wise decision. Just like your rewards card, you can choose to do this even when other payment options are at your disposal. Make sure that the benefits of using your card in this way are worth the potential risks.
Though it may seem risky, buying items such as high-end electronics may best be paid using credit cards. Most credit card companies provide protections that can be advantageous when making large purchases. Such protections may include fraud coverage in addition to the chance to dispute any charges in the event of errors. Many cards may even provide automatic extended warranties on some purchases. For rewards cards, large purchases can also significantly help add to the rewards total.
Hotels often require credit cards to hold reservations, and your card may feature travel insurance coverage. If you have a frequent flyer card, the distance you fly will be rewarded to you upon future travels. You may also get cash rewards for any travel-related purchases.
When shopping on the Internet, using your card makes the process easy, but it may also protect you from fraudulent activity. Many cards protect you in the event your card or information are stolen, and they may provide additional coverage if your items arrive damaged or don’t come at all. Be sure to use your card only on secure sites, and be careful when providing personal information.
There are many situations when using your credit card will bring significant benefits, but remember a few rules before you get too excited. First, check your credit card policies before attempting to use your card in any scenario as not all cards can be used the same way. Also, remember to pay off every charge by the end of the payment period to avoid paying big time for a small forgotten purchase.