5 Benefits of Using Credit Cards for Everyday Expenses

Gone are the days of hearing the ding of the cash register, as more and more shoppers choose to tap or insert a credit card for payment instead of paying cash.  

And why not? Credit cards are accepted practically everywhere, they’re easy to use, and they’re especially easy to carry around.

But does that mean they should be used for every purchase you make? Here is a list that explains 5 factors to consider as you contemplate whether to get a credit card and, if so, how much to use it.

1. Credit cards can help you build credit

To build credit, you must use credit — and credit cards are one of the best ways to help build your credit. Everything you do with a credit card is noted on your credit report and may be used to determine your creditworthiness for future loans, as well as the interest rates and terms you’ll receive on the money you borrow. When it comes to using a credit card to build your credit, there are three key things to remember:

1. Make purchases you can afford. Regular, manageable purchases on your card are a good way to build credit history. Just be sure to stay within an affordable budget.
2. Keep your balance low or paid off. Having balances that are “maxed” or nearly at their limit can hurt your score. A smart strategy is to keep your credit utilization rate under 30%.
3. Pay your bills on time. Late payments or missed payments are one of the largest factors that can negatively impact your credit score.

2. Credit cards can be rewarding

One of the most compelling reasons for using a credit card is the potential to earn rewards. Many cards offer rewards on the purchases you make in the form of cash back, redeemable points or travel miles. Some may also include substantial upfront cash or points bonuses if you meet specific introductory spending requirements.

The trick is to select a card with the right reward program to match your spending habits. For example, if you use your card on travel-related purchases then a card that offers travel rewards might be ideal. If your card use is primarily for everyday purchases, then you might get more value from a credit card that rewards grocery, gas and entertainment spending.

In many cases, cards that promote enticing rewards often carry higher interest rates, hidden costs, or an annual fee. While this isn’t uncommon or necessarily something to avoid, it does highlight the importance of reading and understanding the requirements associated with any credit card you choose before you get it, as well as making sure you can afford the rewards it offers. 

3. Credit Cards often offer travel advantages

Many credit cards provide certain advantages and useful tools while traveling. These may include:

• Travel insurance on purchases
• No foreign transaction fees
• Lounge access
• Statement credits for Global Entry and TSA PreCheck
• Savings with partner brands, rental car companies, and hotels
• Free checked bags
• Lost luggage reimbursement

For the avid globetrotter, taking advantage of a credit card’s travel benefits may be a no-brainer. However, for those who don’t make a regular habit of traveling, it’s important to recognize that these benefits often carry an additional cost in the form of an annual fee or require a higher credit score to qualify. As always, familiarize yourself with the terms and conditions and expiration policies for the benefits you accrue.

4. Credit cards offer more protection than cash

Not only are credit cards easier to use and carry around than cash, but they also feature several added layers of consumer protections that cash simply can’t offer. Here are a few benefits that come with using credit cards:

• Most credit cards come equipped with zero-liability protection on any unauthorized charges reported within a certain time.
• Most cards will return and resolve any fraudulent purchases made without your knowledge or consent.
• Many cards offer purchase protection, giving you the option of a reimbursement or replacement for any item you bought with your card that is damaged or stolen.
• Some cards even offer price protection, which gives you a refund if the price of an item drops after purchase.
• Credit cards eliminate the need to carry around significant amounts of cash.

Most consumer protections offered on credit cards require prompt action within a certain number of days following an instance of fraud or theft. If this time window is missed, your opportunity to resolve the matter or receive a full refund/reimbursement could be impacted.

5. Credit cards make it easy to track your spending

For many, keeping track of how much money you’re spending may seem like a full-time job. With credit cards, however, everything is tracked by the issuer and shows up on your statement, including how much you spent, where you spent it, and when you spent it. That means less time and headache tracking down receipts, forgetting to write a memo on a check, or keeping a ledger. Some credit card issuers may even automatically categorize all your purchases by type for easier tracking. Additionally, many budget apps allow you to import data from your credit card or bank accounts for easier budgeting.

Credit cards provide a host of helpful benefits and services with regards to tracking your purchase information, itemization, and even putting spending limits in place, but it is still up to you to spend responsibly and make payments on time. Failure to do so can result in late-payment fees, interest charges on the unpaid balance, or even interest rate hikes—which can make your debt harder to pay off and even damage your credit.

Zions Bank is here for you every step of the way

Zions Bank’s collection of Visa^® credit cards are designed to fit any lifestyle, with benefits including cash back, rewards and low interest rates. To learn more about the credit card options Zions Bank offers or how to use them to your advantage, visit Zions Bank online or stop by a local branch and speak with one of our experienced bankers today.