7 Responsible Reasons To Use A Credit Card

How many times have you heard financial advisors or other experts warn against credit cards? Their reasons are valid — after all, many people who have credit cards use them irresponsibly and let a mountain of debt accumulate around them. 

But, just like there’s a wrong way to use credit cards, there’s a correct way. When used responsibly, credit cards can help you build your credit and your finances. 

Investopedia offers seven (responsible) reasons to use your credit card.

1. Sign-up Rewards

Many credit card issuers offer sizeable bonuses for new applicants. If you have good credit, you could see rewards valued at $150 or more if you spend up to a set limit after creating your account. 

Sometimes, issuers provide incentives such as extra reward points or miles you can exchange for travel perks, gift cards, credits, and much more. On the other hand, when you open a bank account and get a debit card, you won’t receive any sign-on bonus or rewards program.

2. Cash Back

Depending on the company, you could get anywhere between 2% to 6% cash back on eligible products and services — however, you generally must meet quarterly or yearly spending limits. The credit cards with the most lucrative cash back deals are the ones with low interest and maintenance fees and a generous rewards rate. Check the fine print and make sure you understand the terms before opening a new account, so you know what to expect.  

3. Rewards Points

With a rewards points program, you get one or more points for every dollar you spend with your card. Most issuers that offer this program extend rewards points for specific purchases, such as those made at a restaurant, gas station, or supermarket. Once you earn a certain number of points, you can exchange them for various rewards such as gift cards, specific products, or travel. 

You have a nearly unlimited number of choices when it comes to credit card bonuses. For example, suppose you open a co-branded card provided in cooperation with a big-name retail chain, hotel company, or even the AARP. In that case, you can turn daily purchases into profitable rewards.

To ensure you make the most of rewards points and other credit card programs, make sure you pick a card that works best with your spending habits — not the other way around. In other words, if you frequently travel for work and stay at the same hotel chain, a credit card that rewards you with discounted rates for that hotel is an excellent option. However, if you don’t prefer a specific chain (or infrequently stay at hotels), this card won’t give you the same benefits.

4. Frequent-Flyer Miles

Every domestic and international airline offers one or more credit cards in cooperation with the major credit card companies. This program typically rewards you with one mile for every dollar you spend, or something similar depending on the card. 

This perk’s real value is based on which kind of ticket you buy with your points or miles. For example, mileage-based sign-up rewards can make credit cards with frequent flyer rewards much more worthwhile. These programs can help you reach the points threshold for flights even faster.

5. Safety

Aside from rewards programs, another reason to use a credit card is to help you recover from or prevent fraud more quickly. For example, if your debit card is stolen, the thief will have immediate access to your bank account. 

And if you have pending transactions, automatic payments, or other expenses, you could get hit with overdraft fees, bounced checks, or penalties for insufficient funds. All of this can hurt your credit score, despite none of it being your fault. Not only that, but it could take a long time to get back the money stolen from you. 

Conversely, if a thief steals your credit card, you don’t pay for those fraudulent purchases. Instead, you would simply call your credit card issuer to report the stolen card. The company will close your account, but you still have all of your funds in your bank account. And, depending on the card, you won’t be responsible for sorting out merchant disputes.

6. Building Credit

If you have bad credit or no credit and want to change that, a credit card is a great first step — as long as you use it smartly. That’s because, unlike banks that issue your debit card, credit card companies let the major credit bureaus know about your payment history. 

There are many credit card options available for people with less-than-good credit, so you should have no difficulty finding one that fits your needs.  

7. Insurance

You may not have known this, but many credit card companies offer several consumer protections like travel insurance, product warranties, and rental car insurance. This relatively-unknown benefit is one more reason why credit cards aren’t always a bad thing. 


  • Fontinelle, Amy. “10 Reasons to Use Your Credit Card.” Investopedia, Investopedia, 10 Oct. 2020, www.investopedia.com/articles/pf/10/credit-card-debit-card.asp.
Ian Schindler