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3 Clever Reasons to Make Purchases with a Credit Card

2022-06-20

Credit cards can help you purchase various items and experiences.

From fast food to a flight to France, one swipe could get you what you need when you need it.

Though credit cards provide maximum convenience, they should be used responsibly.

This begs the question: what’s the best way — or the smartest way — to use a credit card? The usual facts hold true: consumers should endeavor to keep credit utilization ratios below 30% and always pay their bills on time.

And if you do get into debt, you should aim to pay it down as soon as possible.

In fact, when a colleague of Warren Buffett asked for the real estate mogul’s advice on credit cards, Buffett simply replied:

“If I owed any money at 18%, the first thing I’d do with any money I had would be to pay it off. It’s going to be way better than any investment idea I’ve got.”

A credit card is a powerful financial tool, but it must be used wisely. Consider the benefits of using your credit card if or when you come across these purchase scenarios on your credit journey.

1. Build Credit

For most people, building good credit is an important goal. You could be using your card for many different purchases, but keep in mind how you treat this privilege could be reported to the three main credit bureaus.

When using your credit:

  • Make responsible purchases you’ll be able to pay back.
  • Consistently make payments on time.
  • Check your credit report and card statements for errors or fraud.

2. Peaceful Travel Plans

Whether you’re traveling for business or pleasure, it’s often smart to pay with your credit card.

Generally, when we use a credit card to book travel accommodations, we have the peace of mind knowing there is a paper trail with purchase amounts, merchants or retailers, and dates we can reference.

While traveling, a credit card is simply an easy and fast way to buy things.

And safer, too. If your card is stolen, you have a Customer Service team who can cancel your card, track potentially fraudulent purchases, and get you a new replacement card. Those things aren’t so easy to do with cash.

3. Safer Online Purchases

Credit cards can offer protection against fraud, which may be truly invaluable, especially when shopping online.

It’s no secret that e-commerce fraud is on the rise. In fact, nearly 20% of online transactions between Thanksgiving and Cyber Monday 2021 were suspected as fraudulent.

While credit cards don’t eliminate fraud, they can provide protections against it. Further, if you receive the wrong item or a defective product, the chargeback process can help you get your money back.

Or, if you purchase an item from an online vendor and never receive it, or if you’re billed incorrectly for a service, you may be able to dispute the charge and get reimbursed.

Moving Forward

When used correctly, a credit card empowers you to pay down debts, to increase your credit, and to enhance your financial freedom.

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First Phase Visa® is issued by The Bank of Missouri pursuant to a license from Visa U.S.A. Inc.

First Phase reports payment history to the three major credit bureaus so it can help build your credit if used responsibly. Building credit is accomplished by keeping your balance low and paying all your bills on time every month. Late payments, missed payments, or other defaults on your account may be reflected in your credit report and may impact your ability to build credit. First Phase begins credit reporting following your first purchase or cash advance using your card.

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This information is presented for educational purposes only. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.