Consumers Spend Just Over Twice as Much Using Credit Cards. Here's Why That's Smart

At first, it sounds like one of the risks of using credit cards. Consumers spend just over twice as much, on average. The average credit card transaction was $99 in 2022. The average debit card transaction was $49, according to credit and debit card statistics gathered by The Motley Fool Ascent.

The glass-half-empty outlook would be that credit cards convince you to spend more. To be fair, that's likely the case for some people. But there are also smart reasons to always put large purchases on your credit cards.

You're protected if anything goes wrong

One of the benefits of credit cards is that they protect you when anything goes wrong with a purchase. If the merchant won't help, you can file a credit card dispute. Your card issuer will immediately issue a provisional credit for the amount of the transaction. It will then investigate, and if it finds in your favor, that becomes a permanent credit. I've used this feature several times to get my money back when a merchant wouldn't work with me.

Debit cards also let you dispute transactions, but they don't protect you as much. You don't get a provisional credit -- your bank investigates first, and you only get your money back if the dispute is resolved in your favor.

There are also issues that you can successfully dispute with a credit card, but not a debit card. For example, you may not be able to get a refund for non-delivery or delivery of the wrong item, according to the Federal Trade Commission (FTC).

Because credit card disputes offer more protection, it's better to use credit cards for large purchases in case of any issues. Many credit cards also offer other complimentary protections that are nice to have on expensive items, including:

• Purchase protection: Covers new purchases that are damaged, stolen, and sometimes even lost. Purchase protection applies up to a set time limit (often 90 days) and maximum coverage amount (generally ranging from $1,000 to $10,000).
• Extended warranty coverage: Adds time (often one year) to the manufacturer's original warranty.

You could earn rewards on that spending

When you use rewards credit cards, you can earn cash back, points, or miles on your purchases. This is an easy way to get something of value back on your regular spending.

Cash back cards are the most straightforward option. You earn cash back, which you can redeem as a statement credit on your credit card bill or as a deposit to your bank account. Some cards earn points you can redeem for travel purchases, airline miles, or points with hotel chains.

If you have a type of rewards card you're interested in, here are some of the top options:

• Best cash back credit cards
• Best travel credit cards
• Best airline credit cards
• Best hotel credit cards

It makes sense to use rewards cards as much as possible so you earn more back. That's especially true on your most expensive purchases. The rewards you earn are based on the amount you spend.

Rewards debit cards are also available. However, they don't earn nearly as much as rewards credit cards.

Stick to credit cards for big-ticket purchases

You shouldn't spend more than usual when using credit cards. That's a common mistake. If you overspend, it limits how much you can save, and it could lead to credit card debt. You should also aim to pay your bill in full every month, to stay out of debt and avoid interest charges.

But when you're making a big-ticket purchase, it's a good idea to put it on your credit card. You'll have more protection if you need to dispute it later. Depending on the card you use, you could get complimentary purchase protection and earn rewards on the purchase.

You could also put all your regular purchases on your credit card. The same benefits apply to purchases large or small, so there are advantages to using a credit card for all your spending. It's up to you, but putting at least your most expensive purchases on your credit card is a smart decision.