4 Reasons to Use Credit Cards Regularly

by Christy Bieber | Updated May 19, 2022 - First published on Aug. 11, 2021

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A mature woman smiles while sitting at her table. She is holding a cellphone and a credit card.

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Using credit cards can actually help your finances in a few different ways.

Although they sometimes get a bad reputation, credit cards can be a really helpful financial tool. As long as you can be responsible with them, you should aim to use them regularly and make as many purchases with them as you can. Here are four reasons why.

1. Credit cards help you build credit

Credit cards can be a great tool to help you improve your credit score. When you use your cards and then make payments on them, this is reported to the credit reporting agencies.

Your card should hopefully show a steady record of paying on time. This can have a big impact on your credit score because payment history is the single most important factor that determines your credit rating.

2. You can earn rewards for spending

Many credit cards offer various types of rewards. For example, you might be able to earn credit card miles or points towards free travel. You might even get cash back for using your cards. In some cases, you could even be entitled to rewards valued at up to 5% of the amount you are spending on the card.

If you earn rewards for purchases you already have to make, such as for gas, this helps to cut the costs of those purchases. You essentially get a small discount or small amount of free money on purchases. Just keep in mind that credit cards have high interest rates, so if you don't pay your balance and you get stuck paying credit card interest, that will dwarf the value of those rewards you've earned.

3. You can take advantage of credit card purchase protections

Many credit cards offer various types of protections for your purchases. For example, you might get price protection. This helps you to avoid paying more than necessary by giving you a partial refund if an item you purchased sees a big price drop within a short period of time. Or you may get an extended warranty that makes your manufacturer's warranty longer. There may also be theft and damage insurance that covers you for the cost of new items for a limited time. Purchase protection can help you to avoid out-of-pocket losses if things go wrong with the items that you charge on your cards.

4. Credit cards make it easier to track your spending

Tracking what you spend money on is a good idea because it helps you to identify areas where your spending may be out of control and where you can afford to make cuts to save more. It can be hard to track spending when you're making purchases in cash, though, since you'd have to remember to keep your receipts or write down every transaction.

If you use a credit card, you'll have a written record of every purchase in the form of your card statements. You can also link your credit cards to budgeting apps that automatically track your spending. This can make it far easier to make and stick to a budget since you can effortlessly see where your cash is going.

Of course, not every credit card comes with rewards or purchase protections. So if you want to reap these benefits, you'll need to shop around carefully, compare credit cards, and find one that offers these features.

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