Credit cards are like any other tool – they can be a great thing, or they can be an implement of destruction.
If you are a person for whom credit cards are bad, don’t read the rest of this post.
If you are able to pay off your credit card balances each month, and not become burdened with credit card debt, you may find some benefit from using credit for certain situations.
I got started thinking about this when I read 6 Wedding Expenses Your Should Always Charge on Credit. I don’t agree with the article entirely, because I think that “always” is a dangerous term, but there is a lot of sense to the logic contained in this post. The same logic can be extended to other purchases as well. Therefore, here are is my list of three things that you should consider paying for with a credit card.
If it can break, and it is expensive, you should consider paying with your credit card. First, you will have a way to dispute the charge if the item stops working shortly after purchase. In addition, most credit cards offer extended warranty protection on purchases. Details will vary by card, but one additional year of warranty is a common offering.
Insurance coverage on a rental car can be a tricky thing. There are two main parts, the regular insurance coverage for the car, its occupants, and any other car and its occupants, plus the additional coverage for the “loss of use” of the rental car if it is damaged. There are also administrative charges and potential “diminution of value” if you are involved in a serious accident. While I strongly encourage you to learn everything you can about this, and not necessarily rely solely on the coverage provided by your card, credit cards do offer an extra level of coverage for your rental. If you are involved in an accident, you will probably need every layer of coverage you can find.
Shopping on the internet has become common and is usually safe, but there are more risks in an online purchase than with a regular bricks-and-mortar deal. You can’t see the product before you purchase it, you have less way of evaluating the reputation of the seller, and then there are all those potential problems with shipping. Using a credit card provides protection against bad businesses, lousy goods and smashed packages.
Obviously, there are a lot of other items for which you could make a valid argument for charging. However, these items are the things that are most likely to benefit from the protection offered by charge cards. If you don’t have a credit card problem, charging these purchases is usually a good choice.