by Josh Biggs in Finance on 29th October 2019

Nowadays, it seems almost every single person out of two uses a credit card when paying for things. And the reason for this is not far-fetched.

Experience shows that if you are disciplined with your finances, then using a credit card is one of the most effective ways to keep your spending in line with your budget. More so, when compared to other payment solutions – such as debit cards – they prove to be more reliable and secure especially when it comes to making purchases.

If you’re among the huge number of internet people who like to pay for things with their credit card, then you will definitely find this article a worthy read. We will be looking at some of the benefits that come with making credit card purchases, which you may not know about.

So without wasting any more time, let’s delve straight in.

Use Anywhere

When you need to pay for something anywhere – car rental, hotel, food, or clothes – credit card is the way to go.

The major reason why credit card payment is universally preferred by merchants is due to how easy it is to charge for damages.

This may not always be the case when you’re using a debit card.

A lot of merchants often reject debit cards, especially when you’re in a foreign country. Even if they do accept, it’s usually after you agree to allow them place a hold on a certain amount in your account as this is the only way they are sure of getting their money after waiting for some time.

Earn Rewards

A lot of credit card companies today offer various reward options to new customers and active users. Some of them may come in form of cash back on payments for items or services, while others may involve earning royalty points that you can redeem for gift cards or other special reward items.

You will rarely find a Bank or Debit Card Company offering such benefits. This is one of the major reasons why credit cards are so popular. It is easily the preferred payment choice by most people both for shopping online and in physical stores.

Most credit card companies like Capital One offer a welcome package to new customers. With a good credit, you can even qualify for sign up bonuses that are worth up to 100 bucks or even more. In some cases, you may be offered a lot of reward points which you can easily redeem.

Capital One credit card Rewards are some of the highest rated you will find in the market at the moment. If you meet the pre-qualification requirements either for a personal or business card, you will get a capital one credit card offer in the mail after your application has been approved.

It is also noteworthy to mention that some of these cards also come with insurance, which may cover travel, car rental and even warranties on purchased items.

Wait Time

One of the biggest benefits of using a credit card for your purchases is that your money doesn’t go away immediately. Unlike debit card transactions where money is instantly withdrawn from your checking account, a credit card payment will not be processed until your credit card bill has been taken care of.

While this may not seem much like a big deal, it can be helpful in certain cases.

When you consider the time value of money, you will quickly realize that, holding back payment to a later date reduces the value of your purchases.

In other words, you end up paying lesser for goods or services thereby creating more wealth for yourself. This may seem insignificant, but it adds up eventually.

In addition to enjoying cheaper purchases, the extra time your cash in your account can accumulate more money for you, especially if your run a high interest account.

Using a credit card also reduces the “watch” time on your bank account. You don’t need to look up your balance every time you make a purchase.

Protection against Fraud

In the midst of growing privacy concern today, cases of data theft and security breaches have become very common. Consequently, there’s increasing need by users for more secure payment solutions that help protect them against fraud.

Credit card is without doubt one of the best solutions available at the moment.

Using a credit card to pay for things online will ensure you don’t get duped by fraudulent websites or individuals. This is because almost all your transactions are monitored by your credit card company, and one of the safeguards they placed on your account is to block transactions from sites that are not secure.

Even if a transaction manages to pull through, your money is still within your reach – all you need do is to inform your credit card issuer of the criminal activity and wait for them to resolve it.

Wrapping it up

No matter how you see it, credit cards will always win for making purchases against debit cards (or at least in most cases).  However, for physical transactions, there may be times when using cash will be more convenient or get you a better deal.

In the end, it’s up to you to decide what works best for you. But we have no doubt, using a credit card is a smarter move for making purchases.

Categories: Finance