Five benefits of using credit cards

Many people have shied away from credit cards after the Great Recession for many number of reasons, one being credit card debt

With that being said, there are also numerous benefits to using plastic, which is why people might not want to get rid of them altogether. 

Benefit No. 1 – Cash back – Consumers who are able to use their credit cards responsibly can potentially save money on every purchase they make. Most cash back credit cards offer 1 percent back on all purchases, and a more for certain categories, such as gas or grocery stores. This cash back can be retrieved as a check or statement credit, among other things. To take full advantage of this benefit, cardholders should never spend more than they are able to pay back, as the interest that accrues on their balance can cancel out the amount they get back on their purchases. 

Benefit No. 2 – Frequent flier miles – Cash back isn't the only reward available from credit cards, as those who travel frequently could benefit greatly from frequent flier miles. Miles can be used to get discounted or free flights, and can be useful for people who fly a lot. However, providers typically charge big annual fees for these cards so consumers will want to ensure that the money benefit they get from miles outweighs the fees. 

Additionally, some credit card companies offer hotel reward points, which are similar to frequent flier miles but used for discounted or free hotel rooms. Travel rewards cards can be great for people who fly often for work, as they can accumulate enough points or miles to get a family vacation for free. 

Benefit No. 3 – Identity theft protection – Identity theft is a major concern when shopping with debit and credit cards. If a criminal gets a hold of a person's information than they could be in a financial bind for quite some time. Using a credit card as opposed to a debit card comes with much more protection against identity theft. Most credit card providers offer zero-liability protection, which means cardholders won't be responsible for unauthorized charges if a card is lost or stolen. Oftentimes, credit card companies will provide users with a replacement card or cash advance while the situation is being resolved. 

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