There is a lot of unfounded fear of credit cards and even more fear mongers. The truth is, there is no reason to be scared of plastic if you know what you are doing. Of course, if you are a shopoholic you shouldn't use credit cards. Knives can be deadly too, but most people know better that to cut themselves, although, of course, accidents happen.
Using credit cards does not mean that you are have to get in debt. According to the law, all credit cards give you at least 21 days and many will give you more to pay off your balance, and if you do pay your balance in full by the due date, you will not incur interest. How easy is that? Pay in full-no interest, no fees, no late charges, nothing!
Using credit cards is not only convenient. It's beneficial, too. It can save you a lot and provide you with the peace of mind that cash simply can't. Credit cards can also protect your purchase. And I am not even going into my favorite topic here: reward or cashback credit cards. There are many other ways you can benefit from using plastic.
Most major credit cards, be it Visa, Master, Discover, or American Express offer extended warranty on every item you buy. As a rule, this warranty adds an additional year to your Manufacturer's Warranty, so if the Manufacturer's Warranty is one year, then your credit card adds another one. Just say no to that extended warranty the stores are pushing on you. You don't really need it.
How many times have you encountered a seller unwilling to take back a defective or unwanted item you purchased? A major credit card will not only make the merchant fulfill their part of the bargain-meaning follow the store's own refund/exchange policy-but it can also do you one better. Many credit cards enable you to get a refund for the unwanted item, even if the store or the seller is refusing to take it back after an extended period of time, often up to 90 days. People rarely know about this perk, let alone use it. Big mistake!
Purchase and Price Protection
A credit card may offer you a Purchase or Price protection. Not all credit cards offer these benefits, but if you have a Visa Signature, a World Master Card, or some premium American Express cards, you might have this benefit without even knowing that. Purchase Protection and Price Protection are different things. With Purchase Protection, your item is insured for a certain period of time (often up 90 days) from theft or damage. With Price Protection, you will receive a partial refund if you manage to find the same item elsewhere at a cheaper price.
Hotels are easy to book with a debit card, but when you arrive, they always want your credit card for so-called incidentals (which can be anything, from the mini bar to charges you make to your room to possible damage to their furniture). If you want to guarantee your stay with a debit card, they will put a hold on your checking or savings account; so you'd better have sufficient funds in the bank or you are going home.
Simply speaking, car rental agencies do not like cash or debit cards. Most agencies will put a very large hold on your debit card in case the car is returned damaged. If you don't have a debit card either, it's even worse, as the rental agency will request you prepay your rental and possible damage in cash. In addition, they will check your credit history, which will put a hard inquiry on your credit report. It is possible to rent a car with cash and debit, but be prepared to spend a lot of time in line and jump through a lot of hoops to get your vehicle.
These are just some examples of how you can benefit from a credit card. I will talk some more about credit card benefits in my next installment.
This is a post by Andy Shuman, a credit and travel expert who blogs at www.Lazytravelers.net. He writes and blogs during and between trips that he enjoys free of charge mostly due to creative use of credit card offers. He believes that credit cards are much more than just a convenient way to pay for a purchase, and that the benefits of responsible credit habits can go far beyond getting the best rates for loans and mortgages.
Andy is the author of bestselling books from Lazy Traveler Handbook Series available on Amazon. When he's not traveling, he lives with his beautiful wife and daughter in Brooklyn, NY.
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