It used to be that using a credit card for purchase was a bad thing. In fact, it used to be implied that using a credit card meant that you actually didn’t have the money and would put it on the card so you can worry about paying it off later. While that is true to the fact that you can pay later (usually takes a few weeks for the statement period to be over to pay by the due date), it actually makes perfect financial sense to not only use a credit card, but to use for every single purchase.
A Simple Way to Track Spending
While you cannot make your mortgage payment or typically your car lease payment (there are certain payments the credits want directly out of your bank account), just about every utility and purchase can be made with a credit card, so it is easy to track spending. Now one can say the same thing about using a debit card, that you can track every purchase as well looking at the full statement, but as we are getting into further, credit cards take the priority.
The Rewards Dollars Add Up
If you are nervous about using a credit card for purchases, that all may go out the window when you see how many rewards you are missing out on by using another payment method. With some cards offering points for purchases that you can redeem for gift cards, others even offer an accumulating balance that once a year you will receive check in the full cashback amount, which could equal to hundreds of dollars. Take a look to see what your current open credit cards offer as far as rewards, and if not good, cut up the cards, keep the accounts open, and find the best rewards card out there, as it would be worth the temporary credit score hit for the new inquiry.
Don’t Have to Worry About a Hold When Booking
If you ever check into a hotel room or rent a car, when you go to use a card for payment they mention that if using a debit card, they will typically place a hold on the account which could be in excess of a couple hundred dollars, to get back when you are finished, but it may take a week or two to get the funds back into your account. With a credit card, if there is a hold, there are not funds to return, and it will be out of there by the time you make the statement payment.
Much like a hold on your account when booking a hotel room, if you ever have fraud with your account, like say someone was able to charge up your account, with a debit card you would be out the money until the bank was able to put the money back into your account. With a credit card, same goes as above and you do not have to even worry about the charge when you go to make your next payment.