You have the choice of paying by cash, debit card, online account or credit card. If you do not have money in your bank or online accounts, then either you go without, or you use your credit card. What about the people who have money in their bank account and still use their credit card? Why don’t they simply use their debit card rather than their credit card?
Are they tempting fate by inviting the potential for problems? After all, one unexpected expense, and the credit card user won’t clear his/her balance…and before you know it…he or she is in a quagmire of credit card debt.
Here are the most common reasons why people with money in their bank accounts may still use credit cards.
Some Credit Cards Offer Cash Back On Certain Purchases
Credit card companies often set up symbiotic (using the word loosely) relationships with other companies where the user gets cash back for buying, renting or using certain things with their credit card. Such offers may compel shoppers to pay with their credit, even if they have sufficient funds in their current account.
Some Credit Cards Have Special Offers For Long-term Credit Card Users
Isn’t it crazy that credit card companies are one of the world’s most successful business types and yet they are still aggressively promoting themselves?
Does anybody else see a problem right there? Either way, some credit cards have rewards for joining, and some have rewards for extended long-term use. Extended special offers are often enough for some people to prefer using a credit card over a debit card.
There Are Credit Cards That Offer Opening Bonuses
The most common opening offer for a credit card is some sort of 0% transfer fee or something of that nature. They exist to convince people to move their debt from one credit card to another. Some of the most enticing offers demand that the account holder uses the credit card for a period of 6 - 12 months, which is another reason a user may prefer a credit card over a debit card.
It Is Not Uncommon For Credit Cards To Offer Travel Rewards
This appears to be a mostly North American offer. Travel to Europe, Russian, New Zealand and such, and this sort of offer is not as common. US citizens may happily use their credit card over their debit card if it earns them air miles that they may put towards future trips.
Some People Use Credit Cards To Build Or Improve Their Credit Rating
A correctly managed credit card that has its balance paid off every month will help improve your credit rating. Use your credit card correctly, plan your purchases, and pay off what you spend, and it will help improve your credit rating. Make sure that every penny you spend is also present in your current account so that you may pay off your credit card in full at the end of the billing cycle (which is usually a month).
Most Credit Cards Offer Fraud Protection
This fact alone is often enough of a reason for some people to prefer their credit card over their debit card. If you report an unauthorized charge to the police and to your credit card company, and they find no evidence that you lied, then you usually get your money back. There are numerous terms and conditions, such as not paying if you were negligent, but usually you get your money back if you are ripped off while using your credit card.
Some Credit Cards Are Better Used In Foreign Countries
Some credit cards allow you to spend in a currency that your debit card doesn’t carry. Some credit cards are preferred in other countries rather than your non-national debit account. Some foreign countries are smothered with corruption where you need the fraud protection that your credit card has.
Most Credit Cards Have Purchase Protection
There are some credit card companies that offer protection against loss, theft or damage of your purchased goods. This usually applies to items covered by the Distance Selling Laws (which are mostly global at this point). That is why buying things over the Internet with your credit card is often a good idea. Purchase protection is a complex issue, so here is a link to a more comprehensive article on credit cards and purchase protection.
Some Websites Make It Easier To Pay With Credit Cards
Numerous hotels and rental companies make it very easy to pay by credit card and they even insist upon it. They prefer credit cards because if you incur extra charges, there is a better chance of them being paid because they can overdraw your credit card and there is always the chance that there is a balance on the credit card for them to draw from. Some rental places may make it easier to sign up or authorize your account if you use a credit card.
SomeCredit Cards Offer Some Sort Of Warranty Extension
For example, some credit card companies will double the warranty protection on certain items that you buy if you use their credit card to buy it. The credit card company may also offer extra protection against fire, theft and accidental damage to your purchases.
Many Car Hire Firms Insist That You Use A Credit Card
It is possible to hire a car with a debit card in many cases, but the car hire firm will make you jump through hoops in order to do it, which often includes larger deposits and higher fees. If you sign up with a credit card, they often make life easier for you.
If you are renting a larger or more expensive vehicle, they may insist upon a credit card because they are more likely to be paid if you incur extra charges, and because a credit card with a balance on it may indicate that you have a good credit rating and/or a good handle on your finances.
Some Providing Spouses Only Give Their Spouse A Credit Card
There are some men and some women that are the breadwinners (the household providers). Since they value their money, they do what they can to stop their spouse going out and spending it all. To limit how much money the spouse has access to, the provider may give that person a credit card.
A Sensible Person May Have A Credit Card For Emergencies
The word “Sensible” was used because when times are tough, or you are bored, or a little upset, or just plain poor, it is tough to resist using your credit card when you know there is money on it. A sensible person with will power and restraint will resist the urge to spend on the credit card. Instead, he or she will suffer as he or she should until he or she engineers better times.
Some Students And Teens Are Only Allowed A Credit Card
A provider may give a credit card to a spouse for the same reason a parent may give a credit card to a teen. In most cases, the teen or student is going to max out the card and then want more cash, but there are some benefits to giving your child (teen or older student) a credit card rather than a debit card. If the card is lost or stolen, then the money is protected, and if the parent’s offspring are scammed (which is more likely with younger and more naïve minds), then there is a better chance of getting the money back.
There Are People Who Don’t Like To Think In The Moment
If you are having a good time, it may put a crimp in your style if you have to think about how much money you have left in your bank account. A credit card with a healthy amount of available funds will help eliminate this concern. You can worry about the amount you spent in the morning when the fun is over.
Written By Ashley Gaynor, 27/11/2016