5 Times to Use a Credit Card Rather Than Cash

You may have heard it's always better to use cash instead of credit when making purchases. Or perhaps you were taught the exact opposite (or something in between). So what's the real story? While it's a good idea to have money on hand, there are definitely occasions when you should swipe your card rather than pay with cash.

1. On a Trip

It's usually best to keep the cash to a minimum when you're traveling, as long as you have a major credit card that is widely accepted. First, you'll have a record of all your purchases. When you're on a business trip and tracking expenses, it's much easier to pay for everything with the same card than it is to meticulously save your receipts for cash purchases. If your card is stolen while you're traveling, you can call your financial institution to cancel it right away. If you don't notice it's gone for a while, most cards offer some kind of purchase protection. However, if your cash is lost or stolen, it's not recoverable.

2. When You're Trying to Build Credit

One of the best and fastest ways to raise your FICO score is to make purchases using credit. Of course, this must be done responsibly. Make sure you choose a credit card with the best terms you can get, and make all of your payments on time. Setting up an automatic payment for your bill each month is a great way to avoid late payments.

3. For Emergencies

Having a line of credit available really comes in handy when life throws a curve ball. When your house requires a major repair, you may not have enough cash on hand to cover it. The same goes for accidents, illnesses, auto repairs and a host of other challenges that can unexpectedly affect your account balance.

4. When Making Major Purchases

A credit card makes it easy to cover a large purchase (such as a new washer/dryer set or big-screen TV) without interrupting your cash flow. You may also get some kind of additional warranty coverage for such purchases, depending on the specific terms of your card.

5. When You're Shopping Online

Of course, you can't use actual cash online. However, you do have a choice between using a credit or debit card. Is there really a difference in this situation? There can be. Using a credit card may offer you some protection beyond what you'll get by simply having the funds deducted from your checking account. The purchase protection policies of many credit cards will shield you against bad transactions, such as receiving a damaged product or not receiving your order at all.

Not all lines of credit are the same, of course. Be discerning and do your research when you choose one. Talk to the experts at your credit union for advice if you're not sure what type of card is right for you. Coosa Valley Credit Union offers a hassle-free credit card with no annual fee and a rewards program. Become a member today to apply.

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