What Are Credit Cards Used for?

by Shanika Chapman ; Updated July 27, 2017

Having a credit card gives you a degree of financial freedom that other payment methods can’t offer. While credit cards often have high interest rates, as long as you pay off your balance each month, you won’t incur any interest fees. If used responsibly, your credit card can be your number one method of payment, reaping you a number of rewards. Or you can choose to reserve your card for certain purchases.

Online Purchases

It’s often best to use your credit card for online purchases, as some businesses may not accept another form of payment. A reputable business will also offer encryption to protect your personal information, resulting in a secure online transaction.

Expensive Purchases

Your credit card may offer "buyer protection," which means that if you purchase an item from a bad business or something goes wrong, your credit card company will open an investigation to help you recover funds.

Everyday Purchases

Many credit card companies offer rewards programs and other incentives that result in cash back for your purchases. Typically, you can expect a 1 percent return on every dollar spent.

Appliances

Credit cards are great for purchasing electronics and appliances since many credit cards now offer extended warranties.

Build Credit

Using your credit card regularly and responsibly will help you restore or build your credit score.

About the Author

Shanika Chapman has been writing business-related articles since 2009. She holds a Bachelor of Science in social science from the University of Maryland University College. Chapman also served for four years in the Air Force and has run a successful business since 2008.