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When Should You Use Your Credit Card?

Technically, you can use your credit card for just about any expense, as long as you have enough room on your balance.

You can use it to fill up your car’s tank with gas, pay for a week’s worth of groceries or manage your streaming subscriptions every single month. Did you know that there are specific expenses that you should always use on your credit card?

When You’re Dealing with a Small Emergency

When you’re dealing with a small emergency expense and you don’t have enough savings sitting in your emergency fund, you should consider a credit tool like your credit card as a solution.

Why? With the help of your credit card, you can cover the emergency expense in a short amount of time. Once that payment is accepted, and the emergency is resolved, you can direct your energy to pay down the balance on your card.

If you don’t want to use your credit card, you could try to use a personal loan to manage the emergency expense. You don’t have to make an appointment at your bank to do this — you can apply for your next loan online as long as you meet the qualifications.

If you get approved for the personal loan, you can use borrowed funds to cover the expense in a short amount of time. After the emergency is resolved, you can focus on a repayment plan.

What are some examples of small emergency expenses?

  • Towing rates after getting a flat tire
  • Plumber’s fees after fixing a clogged toilet
  • Dental treatment costs after breaking a tooth

You May Like to Read: Which Type of Spending Should Go On a Credit Card?

When You’re Online Shopping:

Whenever you’re online shopping, you should use your credit card to pay the final bill. Why? You can easily dispute credit card charges when your shopping experiences turn sour. So, if you pay for a product that never shows up or shows up damaged, and the merchant isn’t taking responsibility, you can turn to your credit card company for help.

They can investigate the situation and determine whether the transaction should go through. This could save you money.

A credit card can also protect you from financial fraud when you’re online shopping. If someone steals your credit card information, you won’t be responsible for unauthorized transactions. The Fair Credit Billing Act limits your total liability for these transactions to $50. Many credit card companies offer zero liability for unauthorized charges.

When you notice signs of fraud, you should contact your credit card company to let them know your information has been stolen. They can cancel your card and investigate the fraudulent charges that have been put on the card so far. In the meantime, they will give you a new credit card.

When You’re Buying Electronics:

Many credit card companies offer extended warranties for electronics and major appliances, which you can use to cover repairs and replacements once the manufacturer’s warranty ends. You don’t have to sign up for (or pay for) an extended warranty program through the product’s retailer.

Another benefit that some credit cards offer for certain products is called price protection. If the price of a product drops shortly after you purchased it with your credit card, your credit card company could refund you the difference.

There is a short timeline where this benefit is available. It’s typically available 1-3 months after the purchase date.

When you find yourself in these circumstances, it’s time to put away your debit card. Use your credit card instead.

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