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4 Reasons You Shouldn't Hate Credit Cards

Many of us cringe when the word “credit” meets our ears. Fresh memories, some still in the making, flood our minds of people losing everything during these past few turbulent years.  Unfortunately, we have convinced ourselves to hate something we once loved so much. If you find yourself having turned against your once precious credit cards, here are four reasons you may want to think about rekindling that credit card romance once again:

1. Credit Cards Limit Your Liability for Fraudulent Charges

The recent Sony Playstation data breach has spotlighted our need for impermeable security. The hack left over 100 million accounts open to thieves and scammers; at least 10 million of those accounts had debit or credit card information attached. Fortunately for credit card owners, Regulation Z caps any liability at $50 if their card is stolen. If just the information is taken, and not the actual credit card, all fraudulent transactions are covered. Debit cards, however, do not have equal protection. Regulation E gives a mere two days to report any fraudulent charges to your bank. If the transactions are reported in time, then the $50 cap applies. If you miss the two day cut off, good luck. Some banks will forgive the charges, but many will not. Either way, money from fraudulent debit card purchases will not be returned to your account until the investigation clears.

2. It's an Interest Free Loan

Times are tough, it’s no secret. Many people are living paycheck to paycheck, and responsible use of a credit card could ease the stress so many in the world are feeling. A purchase made today might not be due on your credit card for another 15 to 45 days, depending on your billing cycle. If your bank account is in the single digits, there is nothing to eat in the cupboards, and you aren’t getting paid until next Friday, take an interest free loan from the credit card company. . . and buy some lunch.

3. Build Credit and Save Thousands

Like I've mentioned before, credit plays a major role in every aspect of your life. Luckily, there are credit cards built for whatever your financial situation may be. Perhaps your credit score is limping along because you weren’t lucky enough to learn about finances at a young age. Credit cards for bad credit can help you rebuild your credit to a respectable number, saving you thousands of dollars on interest and fees throughout your life.

4. Skymiles, Points, Rewards, and Cash Back

You have worked hard for your paycheck and a good credit score! Why not earn while you spend? Use a credit card for your every day purchases, pay off the balance each month, and watch the points accumulate. My average client easily has $1500 of expenses they could put on rewards credit cards each month. The standard minimum of 1% cash back on purchases yields a $180 check each year! Credit cards are amazing financial tools when used correctly. If we each take a few moments to evaluate our finances, rather than swiping thoughtlessly, they could bring us plenty of benefits instead of heartache and stress. How do you use credit cards for your benefit?

Photo credit: Shutterstock / Tom Wang

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Logan Abbott's picture

Logan Abbott is a personal finance and credit card expert with over 5 years of experience writing about each topic. He is a graduate of the USC Marshall School of Business, and also contributes to other online finance publications. He has been quoted in the New York Times, San Diego Union Tribune, TheStreet, and more.

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eliza @ merchant services's picture

Hi there! Good points on the advantages of using a credit card! :D