Why Should You Use A Credit Card For Purchases? |

Why Should You Use A Credit Card For Purchases?

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Financial planners put significant effort into discouraging the use of credit cards among the general public, and with good cause. Too many of us get into credit card debt because of careless use. Credit card purchases are preferable to debit card purchases, and cash transactions should be minimal, contrary to common thinking.

Let’s look at the benefits of using a credit card and some effective ways to put your card to work.

One-time Payments

Nothing beats the potential for a welcome bonus upon first using the best credit card in India. Customers with good or excellent credit ratings have a better chance of being approved for credit cards that come with bonuses of $150 or more (sometimes much more) in exchange for making a certain amount of purchases (anywhere from $500 to several thousand dollars) within the first few months of account opening.

Some cards offer sign-up bonuses as reward points or miles to redeem for cash back, free flights, or other travel or commerce benefits. On the other hand, a regular debit card with a bank checking account does not often come with any sign-up incentive or continuous opportunities to earn rewards.


Discover, a credit card used primarily in the US, is credited with popularising the concept of cashback. The card’s premise was straightforward: cardholders would receive a percentage of their purchases in the form of a cash refund for each dollar they spent. The idea has developed and advanced to the present day. These days, you may get 2%, 3%, or even 6% cash back on specific purchases with some credit cards; however, these enticing offers typically come with quarterly or annual spending limitations.

In terms of cashback, credit cards with low-interest rates and fees and a generous rewards program are the best option.

Reward Points

Credit cards are structured such that cardholders can accumulate one or more points for every dollar spent. Bonus points or other perks can be earned on various purchases, including dining out, grocery shopping, and gas. With enough earned points, you can use the credit card company’s online rewards site to redeem for trips, restaurant and shop gift cards, and products.


Credit card purchases help you avoid fraud-related financial losses. The funds are stolen the moment your debit card is used. Online payments and mailed cheques for legitimate needs can bounce, incurring insufficient funds fines and damaging your credit. Late or missed payments can harm your credit score, even if unavoidable.

Depending on the bank’s investigation process, it may take some time before fraudulent transactions are undone and funds are returned to your account.

However, suppose your credit card is stolen and used illegally. You won’t lose any money because you can report the theft to your credit card company and stop paying for unauthorised purchases. The best credit card companies in India, like Visa and Mastercard, offer “zero liability” protections for fraudulent charges to encourage card use over cash or check.

Grace period

A debit card purchase immediately deducts the money from your account. Credit card purchases don’t immediately deduct from your checking balance; instead, they sit until you’re ready to pay off your monthly credit card bill.

There are two advantages to holding onto your money for the time being. First, any savings from accounting for the time worth of cash, however small, is welcome. You get a little discount when you pay for an item over time. In addition, if you use a credit card instead of a debit card, cash, or check, more of your money will stay in your bank account. Credit card interest can be earned during the grace period if credit card payments are made from an interest-bearing checking account. The extra money could amount to a significant sum in the long run.


Credit cards typically come with a slew of perks that cardholders don’t know about, like travel insurance. These extended product warranties can surpass the manufacturer’s and even rental car insurance (though it’s usually secondary to your personal auto insurance).

Universal Adeptness

Sometimes, a debit card just doesn’t cut it for the purchase. A credit card will simplify booking services like vehicle rentals and hotel rooms. Vehicle rental agencies and hotels prefer payment by credit card because it makes it easier to assess and collect damages incurred by guests. The merchant doesn’t know the full price of your transaction unless you’ve already paid for your rental or hotel stay in advance. As a result, the store may reserve a specific percentage of your total credit limit in case unforeseen charges are made to your account.

As a result, if you want to pay for one of these things using a debit card, the company may demand that you authorise them to keep several hundred dollars in funds. Furthermore, even if your debit card has a well-known bank logo, it may not be accepted at stores if you’re abroad.

Critical Thinking

Only the self-controlled can use credit cards responsibly, keeping in mind that they must pay their monthly charge (in full) on or before the due date. If you’re already an expert credit card user, you should switch your spending over to your credit card and use your debit card only for cash withdrawals. If you do, you’ll have an advantage over others who pay with debit cards, checks, or cash due to rewards programs, shopper protections, and the worth of money in hand.

Image Credit: Photo by Green Chameleon on Unsplash (Source)

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