Credit Cards – 7 reasons to use plastic

If your budget is tight should you use credit cards?

Hopefully you have a good handle on your expenses and income now that you are laid off.  Many people wisely take the approach to their situation by paying off credit card debt and being debt free.  That is a very good principal to follow, but in our day and age there are some good reasons for you to use plastic.  Just don’t spend on your card to get a ‘warm and fuzzy’ by buying something.  Use discretion and restraint when spending.

1. When building up reward points.  If you can use your card for gas and other purchases and have the discipline to pay your card off immediately, then by all means spend away on your card.  But use it only within your budget guidelines.

2. When using a budget.  If it’s easier for you to use the credit card bill to help you itemize your expenses, then this is the way to go.  Our family uses an Excel spreadsheet to track our check and debit card expenses and balance the checkbook.  In that we have a field to enter different tracking codes, which helps as well.  That could be another way to track expenses.

3. When buying necessities.  Plastic can be a big help in emergency situations such as health care costs.  If you don’t have the cash or money in the checking account and you need some medical supplies, or show up at the hospital, then the card can be helpful.

4.  Traveling.  When you are traveling, your credit card should be the only way to charge things.  Do not use your debit card, because most banks and lending institutions do not see the debit card as a credit card, even though the credit logo is on the front.  Most credit card companies will back up a purchase that goes wrong, such as improperly described item, or such things as purchasing airline tickets.

5.  Business expenses.  During my layoff period, I have been taking some short term projects to help pay expenses.  In order to go out of town and pay all necessities, I use my credit card.  It helps keep track of my expenses and allows accountability for the expenses.  But I do pay the card off in full when the check comes in for the work.

6.  Making larger purchases.  It makes sense to put a large purchase on your credit card, but realize the interest rate you are paying.  Look for the ‘X months same as cash’ offers, which may provide you with little or no interest to be paid.

7.  When buying online.  Make all of your card purchases online with a credit card.  Do not use a debit card to make online purchases.  If for some reason you are in an unsecured wireless area and your PIN goes across the airwaves and some hacker gets it, your account could be wiped clean in minutes with no one to help you recover your losses..  The credit cards offer the benefit of covering most if not all losses contributed to false charges.

Be a wise consumer.  It’s your money, so spend it wisely.  If you feel you are tempted by the credit card in your wallet or purse, take it out and leave it at home until you need it.  Don’t spend on your credit card hoping that future currently unknown income will pay the bills. It may come back to bite you.