What Are the Advantages of Using Credit Cards?
Learn more about the benefits of using credit cards and how to use them responsibly
When you’re budgeting for life’s adventures—and the expenses that come along with them—a credit card may be part of the equation.
There can be many advantages to using a credit card, as long as it’s done responsibly. Learn more about how using credit cards might help you earn rewards, build credit, manage your finances and more.
Credit Card Rewards
Earning rewards can be a great advantage of having a credit card. With so many different types of credit cards out there, finding the right rewards card for you is important. Here are a few types of cards to know about:
Cash Back Credit Cards
Cash back credit cards are one common type of rewards card. These cards let you earn rewards for everyday purchases like groceries, gas, dining and entertainment. For every qualifying purchase, you earn back a percentage of what you spend.
Travel Credit Cards
If you’re an avid traveler, a travel credit card might be for you. You can earn rewards miles or points on qualifying purchases. Then, you may be able to redeem them for things like airline upgrades, vacation rentals, hotels, cruises and more. Some travel cards may let you redeem your miles on things other than travel too.
Keep in mind that each rewards card might have different approval requirements, benefits and redemption options. And some cards offer more flexible ways to earn and redeem your rewards. So before you apply, it’s a good idea to do your research and compare cards to find one that suits your spending habits and lifestyle.
Points Credit Cards
Points cards are another type of rewards card. The way points are earned, calculated and redeemed can vary widely from card to card. Some may work a lot like miles cards. Others may function more like cash back cards. If you think a points card is right for you, make sure you understand how the rewards work and any limitations.
With any rewards card, it’s a good to double-check that your rewards won’t expire before you have a chance to use them. Rotating rewards categories are another thing to investigate too.
Help Building Credit
A good credit score can help you get better interest rates for things like car loans, personal loans and mortgages. A good score might even help when it comes to getting certain jobs or renting an apartment.
Responsible use includes things like always paying your bills on time every month and keeping your credit utilization ratio low. Here are a couple ways you might start to build your credit history with responsible credit card use:
A secured credit card can be a great option for people who are establishing, building or rebuilding their credit. And using a secured card responsibly could make you a better candidate for traditional credit cards in the future.
You can make purchases with a secured card, just like with a traditional credit card. But it’s considered “secured” because it requires you to put down money as a security deposit to open the account. Think of it like a deposit you pay before renting an apartment. These deposits are usually refundable. But credit card issuers each have their own policies about when and how refunds are given.
As with any credit card, getting approved for a secured card isn’t guaranteed. Each credit card company has its own policies. And aside from a security deposit, there may be additional approval requirements.
You might consider asking a loved one or someone you trust with a good credit score to add you as an authorized user to their account.
Authorized users typically get their own card and can make their own purchases. But the primary account holder is ultimately responsible for payments.
You can check with the credit card issuer to make sure it reports authorized users to credit bureaus. If information doesn’t appear in your credit reports, it can’t help you build credit.
Digital Tools and Account Management
In today’s digital world, shouldn’t your credit card be able to keep up? Luckily, the advantages of some credit cards include a wide range of digital access.
- Manage your account on the go. Your credit card issuer might have an app—like the Capital One Mobile app—you can use to manage your account anywhere, anytime.
- Never forget a payment. Having trouble remembering when your payment is due? Easy. All you have to do is set up automatic payments for your account to have it done for you. Capital One’s AutoPay gives you multiple options to decide how much you pay every month.
- Manage your finances. Digital features like Eno, your Capital One assistant, help keep an eye on your accounts 24/7 and send alerts when something’s up. Eno can also help you keep track of subscriptions, duplicate charges, refunds and more.
- Monitor your credit. Monitoring your credit is a great way to keep track of your progress and make sure your credit report is error free. And with digital tools like CreditWise from Capital One, you can access your TransUnion® credit report and VantageScore® 3.0 credit score online without hurting your score. And it’s free for everyone, not just Capital One customers.
Unfortunately, credit card fraud can happen to anyone. But the good news is that many credit cards offer fraud protection to help you keep your money safer.
Fraud protection and security features vary by card issuer. Here are some features and benefits Capital One offers:
- $0 Fraud Liability. If your card is lost or stolen, you won’t be responsible for unauthorized charges.
- Security Alerts. Get notified via text, email and phone about any suspicious activity on your account.
- Card Lock. Easily lock your card if it’s misplaced, lost or stolen.
- Virtual Card Numbers. Keep your real card number to yourself, and shop online more securely with virtual card numbers.
Security features like these can help give you peace of mind knowing your credit card issuer is helping you keep your money safer.
Find a Card That Fits Your Lifestyle
When you understand the advantages of credit cards, you can plan for today, tomorrow and the unexpected. But remember, to benefit from all the advantages credit cards offer, you have to use them responsibly.
You can explore all the Capital One credit card benefits. And if you decide one is right for you, consider using Capital One’s pre-approval tool. It’s a quick, secure way to find out whether you might be approved for a credit card before you apply.
Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.
We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.
Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many credit scoring models. It may not be the same model your lender uses, but it can be one accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Some monitoring and alerts may not be available to you if the information you enter at enrollment does not match the information in your credit file at (or you do not have a file at) one or more consumer reporting agencies.