We constantly hear and read about all the negative attributes of credit cards. But if we use them correctly, we can take advantage of the many credit card benefits that are available! Below are the four most prominent:

Credit Card Benefits On Items You Purchase

One of the most useful of these credit card benefits is a feature that is sometimes known as “purchase protection“. Most of the major types of credit cards will shield you from loss if you are not happy with your purchase within a certain period of time.

Imagine that you purchase a brand new HTC DROID INCREDIBLE . Then you go to set it up and realize that it’s used – the stored numbers of “mom”, “wifey”, and “Nicole” give it away! You bring it (or send it) back to the vendor and demand a refund, and they refuse to issue one (claiming that you just didn’t like the phone and you put the numbers in, just to try and return it 😮 )!

If you paid with cash, you would have to fight with the vendor in order to get your money back. However, if you made your purchase with a credit card, all you have to do is call the issuer and tell them to withhold payment to that vendor. Once you display that you are not satisfied with the item and have returned it, they will credit the charge back to your card!

Credit Card Benefits That Protect You From Identity Theft

Most credit cards also offer fraud protection. If you report your card lost or stolen and then charges are made against your account, you will only be liable for the first $50. So if someone steals your credit card and then goes out and buys a new Apple MacBook Pro , you will only have to pay $50 for the charge. Actually, many banks will even waive the $50 fee for you!

Did Somebody Say Rewards?

Many cards will offer a rewards program, that will convert your purchases into airline miles, points that are redeemable for various merchandise and gift cards, and even cash! The more that you spend, the more rewards that you can earn.

Some finance “experts” don’t like credit card rewards because they believe that these programs promote irresponsible spending. If people are buying things that they wouldn’t normally buy, just to get a few more points, then these experts are correct. However, these benefits are worth it to those who are able to manage their spending in a disciplined fashion.

Easier to Track Spending

Most banks will offer a breakdown of your monthly and annual spending online. This can be very useful when you want to get an overview of your spending. If you make all of your purchases with one card, then all of your spending will be presented to you in a nice table or graph – and you will also rack up a fair amount of rewards!

A Quick Warning

We touched on this already, but if you have had problems with making irresponsible purchases in the past, please make sure you have addressed your undisciplined financial lifestyle before considering these benefits. One or two bad purchase can easily offset these credit card benefits. If you are currently battling with debt, here are a few simple ways to cut your credit card expenses. Then be sure to check out this credit score guide to see where you stand.

photo by The.Comedian

This article was featured in the following carnivals:

Carnival: Best of Credit Cards and Money

Family Finance Carnival

Carnival of Wealth #27 – Feb 27 2011 Edition

Reader Questions:

1. Do you use a credit card for any of the reasons listed here?
2. Have you ever needed to call a card issuer to get a refund because the vendor refused to give you one?