Top 7 benefits of getting a credit card

If you live in the US, it may have been quite some time since you actually touched paper money. However, not all digital replacements are created equal, and whether you use a debit or credit card can impact the rewards you earn and the purchase protections available to you. Global acceptance, ease of use and enhanced fraud protection are good reasons to use a credit card whenever possible.

There are cases where using credit cards might not make sense. Credit card interest rates are incredibly high, so if you’re currently in debt or are likely to carry a balance month to month, the interest you pay will likely wipe out any benefits you’d earn from using a credit card.

Here are seven reasons you should consider getting a credit card.

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1. To build and improve your credit score

Building credit is the ultimate catch-22. Lenders don’t want to issue credit to people who don’t have a proven track record of paying back on time, but the only way to build a track record of on-time payments is if someone issues you credit in the first place. Using a credit card responsibly is one of the easiest ways to prove your creditworthiness and improve your score in the short and long term.

There are five factors that make up your FICO credit score, and the most considerable weight (35%) is given to your payment history. Your history isn’t affected by the size of the payment, so even if you’re only spending $5 or $10 a month on a credit card, you can start building a streak of on-time payments. No matter what stage of life you’re at, this is one of the best decisions you can make for your future self. Building a strong credit score now will make it much easier to get approved for a car loan or mortgage in the future, and possibly at a lower interest rate.

2. To build responsible financial habits

Using credit cards is one of the best ways to develop a well-rounded set of responsible financial habits. Remembering to pay off your card every month, staying on top of your spending and learning not to spend more than you can afford are all necessary steps to using a credit card responsibly.

Yes, you might have to put in a little bit more work with a credit card, but making the effort can help you learn how to be financially savvy and responsible in other areas of your life as well.

3. It’s a convenient payment method for everyday expenses

With contactless payments on the rise in the US, it’s getting easier to use credit cards. With mobile wallets and technology like Apple’s Face ID and Touch ID, it’s often possible to make a purchase without taking the card out of your wallet or typing in a number. This adds another layer of security to the transaction because contactless payments make it harder for a bad actor to steal your credit card number. Many mobile wallets don’t send your actual card number to the merchant; instead, they send a “token” approving the transaction without sharing your physical card number.

4. Protection against fraud and unauthorized transactions

Credit cards generally offer better protection for your purchase than debit cards (and certainly more than cash). Most credit cards offer basic purchase protection in case you don’t receive the goods or services that you order, and some offer additional coverage in certain categories including cell phone insurance, rental car insurance and travel protections such as trip delay or lost luggage insurance.

There are plenty of things you can do to keep your accounts safe, but most people will experience getting a card hacked at least once in their lives. This is obviously not a fun scenario to be in, but it’s one of the areas where credit cards perform the best compared to other payment methods.

Imagine this: You’re in the car on the way to work when you see a notification on your phone. Someone hacked your Amazon account, and because your cards are stored online, they went on a shopping spree before you even noticed. You call your card issuer and the company instantly freezes your account and removes the charges you reported as fraudulent. If you have a premium card like the Chase Sapphire Reserve?, the bank may even overnight ship you a brand new card to start using the next day.

The best part is that many of these protections are enshrined in law, including the Fair Credit Billing Act, meaning your maximum liability isn’t up to the discretion or generosity of each specific bank — there are legal thresholds they have to meet. If someone uses your account number without obtaining your physical credit card, you are not responsible for any charges you did not authorize. Even if your card is lost or stolen, the maximum amount you might be responsible for is $50. However, with a debit card, your personal losses can range from $0 up to all the money in your checking account and any linked accounts the hacker is able to access, depending on how long you take to report the card as lost or stolen.

5. It can act as an emergency financial safety net

It’s best to pay your balances in full each month to avoid racking up interest, but sometimes life throws you a curveball you weren’t expecting, and having a large limit available on your credit card can be incredibly useful. Maybe you have a medical emergency, you’re in a car accident or your home gets damaged in a storm. In all of these cases, you may be forced to pay a large bill upfront while you wait for your insurer to settle your claim. If you don’t have enough cash in your checking account, using a credit card as an emergency safety net may be the only option you have.

6. Access to rewards and perks

The credit card rewards market continues to heat up, and now just about everyone can find a card that’s perfectly suited to their needs. Want to earn cash back on all your purchases without paying an annual fee? The Chase Freedom Unlimited? has you covered. Looking for reward miles to jump-start your next vacation, and maybe some airport lounge access while you’re at it? Look no further than the Capital One Venture X Rewards Credit Card. Need a large credit limit to grow your business? The Business Platinum Card? from American Express * The information for the The Business Platinum Card? from American Express has been collected independently by CNN Underscored. The card details on this page have not been reviewed or provided by the card issuer. and Capital One Spark Cash Plus are built for you. As long as you’re using your cards responsibly, earning cash back or travel rewards can help take the sting out of paying your bills.

7. To make online shopping and traveling easier

Credit is a promise that you will pay back what you borrow, and if you’ve ever checked into a hotel, that’s the guarantee they ask you to make when they swipe your card for “incidentals” before handing over a key to a room with a stocked mini-bar. At higher-end properties, those holds can get quite large — sometimes more than $200 for a stay. If you pay with a debit card, that hold comes out of your checking account and even though it will get returned if you don’t charge anything to the room, that’s money you might not be able to spend on your trip. If you put it on a credit card, the hold will eat up a tiny amount of your credit limit but shouldn’t otherwise be that noticeable.

This same idea of protecting your cash applies to online shopping. If you fall victim to fraud after using your card information to shop online, credit cards protect your personal checking account from scammers while debit cards can leave you exposed.

Using a credit card can also provide a number of benefits if you’re traveling internationally or making a purchase from a foreign website. Many of the best credit cards on the market don’t charge foreign transaction fees, whether you’re paying for dinner on vacation or ordering business supplies from an international vendor. While there are some debit cards that offer this benefit, using a debit card typically won’t earn you rewards the same way a credit card will.