Apply for a Loan
A woman smiles as she makes an online purchase after learning why it's often best to use a credit card over cash.

5 Reasons to Use a Credit Card Over Cash

When it comes to making purchases, some people prefer using cash over a credit card. However, this may not always be the wisest choice in today’s world. Nowadays, there are valid reasons to use a credit card over cash! 

For starters, credit cards offer protection cash simply doesn’t. They also feature excellent security, convenience, and long-term benefits. Let’s look into five ways using a credit card over cash is a better advantage to you in the long run. 

1. Better Security if Lost 

Sometimes we misplace our phone or wallet. If it’s in public, chances are you may never get it back. While there are passwords to keep a stranger out of your phone, you can’t do the same with cash. 

When you lose your cash, it’s simply lost money you can’t ever regain. However, a lost credit card is easy to correct. Right away, you can call your credit card company to explain the situation and request that they shut down your card. Once shut down, you can immediately request a replacement card. 

While you wait for your new replacement card, it would be wise to monitor your account and check for any strange activity or charges. This way, should anyone have enough time to make an unwanted charge, you can declare it as an unauthorized purchase and report it to your provider. In many cases, it will be reversed immediately so you don’t have to worry.

2. Buyers Protection 

Unlike cash, credit cards also offer the benefit of buyers protection (more commonly known as purchase protection). This is a type of insurance that reimburses you should an item you buy is broken or stolen. While some feel they may never need it, others are grateful when finding themselves with a stolen or broken purchase. 

When dealing with a damaged or stolen purchase, immediately contact your credit card issuer to alert them. While the time to file a claim can be generous, it’s best to start the process as soon as possible to make the claim easier to handle.

After providing the necessary documents and information, you can be met with a nice reimbursement for your troubles. This is something that can’t be done with mere cash! Purchase protection is a valuable benefit offered by many credit card companies that can help you recoup any lost expenses.

3. Better Convenience 

Simple convenience is one of the best reasons to use a credit card over cash. It makes carrying a certain financial amount easier with a single card as opposed to physical dollar bills. As long as you pay your bill on time, a credit card is a logical alternative. 

Credit cards have also proven to be more secure compared to carrying cash in your pocket or purse. Without warning, your cash can fall out or suddenly be stolen. Worse, you don’t have the option of saving your money by freezing it like you can with a card. 

These scenarios happen far too often in the world and you don’t want to lose cash you can’t ever regain. Credit cards are small, convenient, and offer far better protection. They’re also convenient for those who travel as you don’t have to worry about keeping track of your money. 

4. Earn Rewards 

Many credit card providers offer rewards or cashback on purchases as an incentive. Gaining rewards points has proven to be an excellent way to earn extra benefits while you shop, especially if you don’t carry a balance. While earning points can take some time, the payoff proves to be very satisfying once gained. 

Many credit card companies offer welcome bonuses if you spend a specific amount of money within a certain time. This can make a difference in your overall budget and what you have to spend. Always evaluate your regular transactions and check that your required purchases don’t exceed the amount you have to spend.

Reward points can also be redeemed for gift cards or other merchandise. You may also be able to apply rewards as a statement credit. However, be sure to account for potential fees when considering a credit card for its rewards.

5. Build a Credit History 

Without a doubt, the chance to build credit is one of the most important reasons to use a credit card over cash. If you have poor credit or no credit at all, a credit card can be the easiest way to build a positive history. Store or gas credit cards are often the easiest to obtain, even if they have limited credit. 

A secured credit card can build your score practically and effectively. The key is to use your credit card wisely and productively, even if you currently have bad credit. With cash, you can’t build a beneficial credit score or history whatsoever. 

Making monthly payments on time makes up the largest category of your overall credit score. You only have to charge a few items each month and on-time and scheduled payments will boost your credit rating. Having a positive credit score will be very helpful in the future if you want to purchase a home, take out a loan, etc. 

Credit Card Over Cash: Enjoy Convenience and Security

Both cash and credit cards have their pros and cons and everyone has their preference. However, there are simply more logical reasons to use a credit card over cash. They’re more convenient, secure, and offer long-term benefits that cash doesn’t bring and prove highly useful. 

Here’s the next question to ponder now: how do you choose the best credit card? 

Many considerations go into choosing the right credit card. You have to determine which one is best suited for your needs and spending habits. It can be overwhelming! Click below for tips to make the process more simple.

How to Choose the Best Credit Card