Why it is beneficial to use a credit card even if you can afford to pay in cash

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It’s all about fringe benefits and more protection.

  • Paying for purchases by credit card provides benefits such as bonus points and purchase protection.
  • While some people use credit cards when they are short on cash, they can also pay to use them when cash reserves are not an issue.

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I have always followed the rule with my credit cards – never charge more than you can afford to pay at the end of the month. This is because I don’t want to spend money on interest. I believe that if I can manage to avoid carrying a balance, I will not have to charge interest on my purchases.

Of course, in some cases, credit card interest is unavoidable, such as if an extraordinary expense arises and you don’t have the cash to pay it. But even in situations where you make If you have enough cash at your disposal, you can still use your credit cards to pay various bills and purchases. That’s why.

Get rewarded for spending money

Whether it’s big car repair bills, medical bills, or everyday purchases like gas and groceries, you can accumulate bonus points or cashback with your credit card. This is the same as getting free money. When you pay for goods in cash, you get nothing back.

In addition, credit cards usually come with sign-up bonuses that allow you to receive a one-time amount of cash to charge off a specific amount of purchases within months of opening an account. In some cases, this amount can be significant, and with the help of credit cards you can actually improve your financial situation.

Get protection that cash doesn’t offer

When you buy things with cash, you have little protection if something goes wrong. But when you charge a credit card for purchases or services, you have more options if the seller or service provider is trying to quickly foist money on you.

Imagine that you are buying an item in a store and it turns out to be defective as soon as you take it out of the box. The seller may insist that the item was in good condition at the time of sale and that you broke it and therefore cannot receive a refund.

In this situation, you will be protected if you buy this item with a credit card. All you have to do is dispute the charge and let your credit card company do its own investigation. But buying with cash in the same situation may mean that there is no way to get your money back.

How to avoid getting burned by credit cards

It is true that credit cards can open the door to excessive spending, which is why some people choose to pay with cash if they have the money. If you have had trouble managing credit cards in the past or do not trust them, then using cash may be your best bet.

But if you have experience using credit cards responsibly, you should know that you don’t need to reserve them solely for periods when you are low on money. Chances are, you can use them all the time and enjoy the benefits that they offer.

However, if you want to make sure you are not charging too much from your credit cards, make a reminder on your calendar to check your balance every week. That way, if you see numbers that are higher than expected, you can cut your expenses until your next billing cycle.

For my part, I recently used a credit card to pay for a home renovation that cost me nearly $ 7,000. I had savings, but with the help of a credit card I got 70 dollars from this account, which was returned to me in the form of cash. Of course, that $ 70 didn’t make a big difference in the overall bill. But in my opinion, this is $ 70 more than I would have received otherwise.

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