The 9 Best Reasons To Use Your Credit Card
February 17, 2026
Do credit cards make it easy to overspend? No question that they do—plastic doesn’t seem like real money and research has shown that there’s more ‘pain’ associated with spending cash as opposed to using a credit card to make a purchase.
However, if you can resist the temptation to spend more than you can afford, using a credit card offers a number of advantages. Here are 9 to think about.
- Incentives for Signing Up.
A number of cards offer a bonus of some type as an incentive for signing up. These can include cash, points that can be redeemed for merchandise, hotel points, or airline miles. In 2025, sign-up bonuses are at record highs, with some travel cards offering up to 100,000 points or $300–$400 in statement credits for new cardholders who meet spending requirements. Cash-back cards commonly offer $200 after spending $500 in the first three months. - Cash Back.
Many cards now offer cash back on purchases, ranging from 1.5% to 5%. Some cards, like the Chase Freedom Unlimited, offer 1.5% cash back on all purchases, plus 5% on travel booked through their portal and 3% on dining and drugstores. Rotating category cards can offer 5% back on select purchases each quarter, while flat-rate cards provide consistent rewards. Always check the terms to ensure the rewards structure fits your spending habits. - Other Forms of Rewards.
Credit cards award points based on how much you spend that can be redeemed for travel, hotel stays, merchandise, or gift cards. Some cards now offer annual credits for entertainment purchases, such as sports, concerts, and streaming services. Combined with a sign-up bonus, you could get a free ticket or stay within a short period of time. Be sure to check for annual fees and compare the value of rewards to your typical spending. - Investment Rewards.
Several brokerage firms, including Fidelity and Charles Schwab, offer credit cards that give you cash back deposited directly into your investment account. This allows you to automatically invest your rewards, helping you build wealth over time. - Fraud Protection.
Paying with a credit card means that if the card is used fraudulently, it won’t cost you. You do need to notify the credit card company, but then they resolve the matter and charges don’t appear on your card while that process is happening. In contrast, debit cards usually don’t offer the same level of protection. If a debit card is used fraudulently, the money from your account is gone. Other scheduled payments can bounce while you rack up insufficient fund fees or overdraft charges. Late payments can lower your credit score. It can take a long time for the fraudulent charges to be removed, and the money may or may not be restored to your account. - Credit Cards Have a Grace Period.
When you make a purchase, the money remains in your checking account until you pay the credit card bill. This feature can make it easier to manage your cashflow during the month. Just be sure you have the money to pay the bill before you spend it—don’t carry a balance from month to month. - Warranties and Insurance.
Many credit cards offer their own warranty on products purchased, which may exceed the manufacturer’s. Merchandise that arrives damaged or is defective can be returned and the charge disputed. Car rentals paid for by credit card often include collision insurance at no additional charge, which can save you money, and some cards offer travel insurance as well. - Wider Acceptance.
Credit cards are accepted everywhere, especially abroad. Hotels and rental cars prefer credit cards when making reservations. Using a debit card can result in a hold of several hundred additional dollars being placed against your account, making that money unavailable for paying other bills. - Building Credit History and Improving Your Score.
Using a credit card and making timely payments is one of the best ways to create a positive credit history, which can also improve your credit score. Using a debit card doesn’t appear anywhere on your credit report, so it can’t help you build or improve your credit score. To maximize your credit score, keep your total balance under 30% of your available credit and always make payments on time.
So save your debit card for making cash withdrawals from the ATM, and when you do use your credit card, be sure to pay your balance in full every month. Using credit cards responsibly can save you money and put cash back in your pocket.
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