When Does Using Credit Make Sense?

When Does Using Credit Make Sense?

When used responsibly, credit cards are a safe, easy way to manage your finances and give yourself a little extra buying power when you need it. Below are three scenarios in which using credit makes sense.

Manage your expenses

Many people use credit cards as a convenient way to track spending and make purchases without using cash or checks. This is a good option for people who are disciplined and will not spend more than they can pay off each month. Be sure to pay your balance each month to avoid interest rate fees.

Pay in advance

You are getting your annual performance bonus in a few weeks, so you can charge an item to your credit card, then pay it off once your bonus arrives. This is a good plan if you're sure your bonus is coming, your spending doesn't exceed the bonus, and your credit card has a high enough limit for the item.

Earn rewards

If you have a credit card that earns rewards, you can turn your everyday expenses like gas and groceries into a positive. Just remember to pay off the total amount when you get your statement each month. Redeeming rewards can be a way to extend your budget for everyday or special items.

In addition to these scenarios, there are also some times when it's safer to use a credit card. Those include:

When you're shopping online

If you detect fraud on a credit card purchase, you can dispute the charge and get it reversed quickly. But if your debit card information is stolen, it gives the thief access to your bank account. You can also enjoy an extra layer of protection by using convenient online payment tools.

When you're making large purchases

Many credit cards offer warranty protection that go beyond the manufacturer's warranty. This is really useful when you buy electronics, appliances or other large purchases.

When you're traveling

The added anti-fraud protection offered by credit cards can be invaluable if your card or its number is lost or stolen. Also, many car rental agencies and hotels only accept credit cards or, if they do accept debit cards, they will put a temporary hold on a portion of your funds as a "deposit," which freezes up money in your account.

If any of these make sense for you, don't forget Coosa Valley Credit Union offers one of the best credit cards on the market. You can learn more, and even apply online, here: https://www.mycvcu.org/credit-card