5 Reasons Credit Cards Are Still the Best Way to Pay

credit cards are safe
The rise of electronic payments has revolutionized the way people spend money. But with debit cards and mobile payment systems gaining in popularity, it's easy to forgot the many benefits that old-fashioned credit cards have over newer payment methods.

As Bill Hardekopf of LowCards.com noted recently, as long as you pay off your outstanding balance every month (admittedly, a big caveat), using a credit card is often the smartest way to pay. Let's look at some of the most beneficial features of credit cards.

1. Easier Dispute Resolution. Credit cards offer broad protections in the event that your card is used for fraudulent transactions, including a well-established dispute resolution process and maximum liability limits. Contrary to what many people think, debit cards do permit you to dispute erroneous purchases, but unlike credit cards, the money has typically already left your bank account by the time you see a bad debit-card transaction. Credit card companies will immediately credit your account for the disputed amount until the dispute is resolved.

2. Better Cash or Mileage Awards. Some debit cards have gotten into the rewards game, but credit cards still have far-and-away the best perks for frequent users. From cash to airline miles and other benefits, getting between 1 percent and 2 percent of your spending back in the form of rewards is common with the best credit card reward programs. You can often do even better with specialty cards on certain categories of purchases, such as gas or travel.

3. Car Rental Insurance. Many credit cards cover damage or loss when you rent a car. That can save you from having to pay for the insurance coverage that rental companies offer. Most credit card car rental insurance acts as a backstop to your existing insurance coverage, so don't expect it to help you avoid having to file a claim with your regular insurance company. But with many damage-waiver provisions costing $25 per day or more at the rental counter, credit card-based insurance can be a real money-saver.

4. Extra Travel Perks and Protection. In addition to car-rental insurance, some credit cards offer a full range of travel-related perks. If you buy an entire trip with a card, you might be covered with trip cancellation or interruption insurance that will either reimburse you for a trip you weren't able to take or pay for extra expenses in getting you to your destination. Other benefits can include trip-delay coverage to pay for meals and hotels if your flight is delayed for certain covered reasons, as well as lost or delayed baggage and flight accident insurance. Some cards even provide roadside assistance, as well as help in getting referred to a doctor or other medical professional when you're traveling.

5. Protection on Your Purchases. Some credit cards provide a number of other protection programs. Price protection will refund the difference if you find a lower price for a product you bought within a certain time frame, while purchase protection and extended warranty coverage can reimburse you or cover the cost of a replacement if something you buy is lost, stolen or breaks. All those perks come with conditions and maximum amounts, but they still provide extra benefits that you won't find with most other payment methods, so be sure to check and see if your plastic offers them.

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Melanie Mathis

I agree.If you need help in Jump starting or Rebuilding Your Credit History with a Secured Credit Card, there are ways to do so. http://www.newhorizon.org/Info/securedcc.htm

Make it a habit to check your credit report, at least every six months. That way, you can be sure that your files will only contain accurate records of your credit and payment activities.

Just remember that the best way to jumpstart rebuild your credit history is to simply settle your secured credit card charges in full and on-time, each month. And see to it that you won’t go overboard with your credit card charges or else you will fail in your quest to establish or regain an excellent credit reputation.

August 08 2013 at 1:22 AM Report abuse rate up rate down Reply
Sophia Anne Walker

You forgot to mention how business credit cards can help rebuild your credit history.

Small business credit cards can be secured or unsecured so even if you have bad credit, you can still open an account by submitting a security cash deposit. As you use your business credit card for purchases and as you make your payments consistently, you are also rebuilding your credit history.

May 30 2013 at 4:59 AM Report abuse rate up rate down Reply
Neil Browne

Good info but many people using credit card already knew it..

May 28 2013 at 6:45 AM Report abuse rate up rate down Reply

Nothing & I really mean Nothing can replace CASH on HAND

April 23 2013 at 2:46 PM Report abuse rate up rate down Reply

You missed one. Protection if your credit card is simply lost. It's cancelled as soon as the credit card gets your fone call.

April 23 2013 at 2:12 PM Report abuse rate up rate down Reply
1 reply to jamestcap's comment


April 23 2013 at 2:18 PM Report abuse rate up rate down Reply

If you really think you are benefiting from using your credit card all the time, you are in la la land. Merchants get charged a hefty fee eveytime you use your card. What do they have to do? Raise prices or go out of business. So, your "perks" are not a great as you think. So, even those who pay cash are paying for your perks, which I personally do not like to do. Some advice. Never, and I say NEVER give out even your zip code to a merchant when making a credit card or debit card transaction. They sell these "lists" to marketers, who use your credit card name and zip code to target you for future sales. They can see what you are purchasing to decide on what to peddle to you. Get enough garbage mail and spam emails already. Only the banks benefit.

April 23 2013 at 12:29 PM Report abuse rate up rate down Reply

Paying with cash means that fewer companies are keeping track of you and your buying habits.....they not only use this information themselves but sell it to other businesses.......but do you really want that? Not me.

April 23 2013 at 11:26 AM Report abuse -1 rate up rate down Reply
1 reply to Pamela's comment

Shucks Pamela. All you gotta do is say "no" when they try to sell you something you don't want. And "Yes" on those rare occasions when it's something you do want. Information overload is more of a problem, but that's why we have trash cans and delete buttons. And the do not call registry.

April 23 2013 at 2:19 PM Report abuse rate up rate down Reply

What a crock!

The only reason consumers are encouraged to use CC is to keep the
banks cash flow from the 2.5% processing fee banks charge each time
a card is swiped from falling. It is far more profitable then the risk of
loaning money.

April 23 2013 at 10:43 AM Report abuse rate up rate down Reply