3 Reasons I Pay for Everything With a Credit Card

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Credit cards are controversial. You might've heard at least a few horror stories about them from people who have ended up in debt. Even some financial gurus are completely against credit cards. Based on that, the idea of using them for all your purchases could seem like a huge risk.

If you spend more than you can afford, that's true. But if you stick to your normal spending habits, paying for everything with credit cards has some great benefits. I've been doing this for years, for a few reasons.

1. I earn travel rewards on all my spending

The main reason I love paying by credit card is because it allows me to earn rewards on my purchases. Personally, I'm a huge fan of travel rewards cards . Every time I use my cards, I earn travel points. I use these points later to cover my largest travel expenses, which is typically business-class airfare or stays at highly rated hotels.

If you don't travel that much, or you'd just rather have rewards you can use at any time, there are also plenty of cash back credit cards . Earning cash back is one of the easiest ways to save more money. You can apply your cash back as a statement credit toward your credit card balance, or you can deposit it to your bank account balance.

For an idea of how valuable credit card rewards can be, let's say you spend about $4,000 per month on your credit cards. You use a card that earns 2% back on purchases. You'd earn $960 every year in credit card rewards. That's value you wouldn't get if you paid in cash or by debit card. There are some options for rewards checking accounts, but they don't earn nearly as much as rewards credit cards.

2. I get purchase and fraud protections

When I make a purchase, I want to feel as if I'm covered if anything goes wrong. For example, your online order isn't delivered, and the seller is unresponsive. Your laptop gets accidentally damaged a few days after buying it, or it breaks down right after the warranty expires.

Paying by credit card could protect you in all of those situations, and many more. With just about any credit card, you can dispute transactions if there's an issue you can't resolve with the merchant. If your order isn't delivered or it's defective, you could file a dispute with your card issuer and potentially get your money back.

Many credit cards also have complimentary protections that apply to eligible purchases. These may include:

• Purchase protection for new purchases that are damaged or stolen
• Extended warranty protection
• Travel insurance, such as rental car insurance and lost luggage insurance

Credit cards also keep you safe from fraud. Card issuers typically have zero-liability policies for fraud. If a transaction is fraudulent, you can dispute it and have it taken off your credit card bill.

3. It's more convenient

I'm not the type of person who likes to keep a lot of cash in a checking account. I'd rather have as much of my money as possible invested or in a high-yield savings account. If I paid for purchases with my debit card, I'd need to keep track of my checking account balance to make sure I didn't overdraft it.

With credit cards, I don't have that problem. The cards I use most often have credit limits much higher than what I spend in a month. I just use them for whatever I need, without worrying about my balance in relation to my credit limit. I also pay my credit card bills in full every month, bringing the balances back down to $0.

What to know about using credit cards

Paying for everything by credit card has its benefits and risks. Using credit cards only works in your favor if you stick to your normal spending habits and pay off your full balance every month. You'll stay out of debt and avoid interest charges this way.

If you do that, you'll come out ahead with credit cards. You'll be able to earn cash rewards or travel points on your spending. You'll be protected in the event of fraud, and your card may also have useful purchase protections, too. Last but not least, you won't need to monitor your checking account balance, like you do when paying with a debit card.

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