If we lived in a perfect world, credit cards would be completely surplus to requirements, but as you know, we don’t live in a perfect world – far from it and although it makes sense to use your credit cards very sparingly, if at all, if possible. There are some times when it makes sense to use your credit card, providing that you are able to maintain discipline when it comes to debt.
Here are just a few example of when it makes sense to spend on credit:
When You’re Earning Cash Back
If you successfully apply for the best cash back credit card you can find, then it makes a lot of sense to pay all of your usual bills and make all of your purchases with the card. Providing you pay off the balance in full at the end of each month, you will effectively be ‘earning’ money or getting a ‘discount’ on the stuff you have to pay for anyway.
When You’re Renting a Car
If you’ve ever tried renting a car with a debit card, then you’ll know that although it is possible in many places, it can be pretty difficult to do. Most car companies want to take your credit cards details in case you cause any damage or fail to return the car on time, which means that if you do use your debit card, they could end up placing a hold of hundreds of dollars on your account, and that could leave you seriously short. So, it does make sense to use your credit card in these circumstances, but you should aim to pay off the balance in full before interest is accrued.
In a Payment-Free Period
Applying for a credit card that has a payment free period of 3, 6 or even 12 months, is a good alternative to getting a loan, which will immediately start accruing interest, when you have a large purchase to make, and you don’t have the funds, but only if you’re confident you can pay it off before the interest free period is over.
Buying Expensive Goods Online
If you’re making a purchase worth more than $100 online, it is often a good idea to use your credit card to do so. Why? Because most credit card companies have a bigger responsibility to protect your purchases than your bank come and should you be ripped off in any way, they are much more likely to refund you.
Booking Hotel Rooms
Like car rental companies, most of the best hotels will put a hold for the value of you5r whole stay on your card, so if you use your debit card, it could tie up vital funds that you need to pay debts. Again, then, it makes much more sense for you to use your credit card with the usual caveat that you should aim to pay off the balance at the end of the month or immediately after your stay – whichever comes first.
Use your credit card wisely, and you’ll never have to worry about debt!