When to Use a Credit Card and Not Cash

Many people still pay for goods and services with cash and this is perfectly fine. Cash transactions are quick especially when you’re only buying a few items at the grocery store or convenience store. Using cash also lets buyers and merchants avoid fees associated with using a credit card. However, credit card issuersoffer their customers many benefits that could make it wiser to swipe your card the next time you pay for something.

Rewards, Rewards, and More Rewards

Rewards and bonuses are one of the main features of credit cards. Retailers that offer their own credit cards have a lot of promos for their customers as a way to gain loyal customers. Retailers such as gas stations and specialty stores promise their customers rebates and special discounts when customers use the store’s special credit cards. Some petrol stations in Malaysia for example, give 8% rebate on gas purchases with store-branded credit cards. It’s best to study your expenses and see whether your favourite store offers their own credit card. You could be saving a lot by using their credit card or at least earn more reward points. This is especially true for frequent flyers who want to earn more air miles by swiping their credit cards.

Extended Warranties

Planning to buy a shiny new smartphone or digital camera? You might want to pay for that with your credit card because many electronic retailers provide 0% interest on credit card purchases. Aside from that, customers who pay for their electronics or appliances can enjoy extended warranties for their purchase. For example, Mastercard and Discover promises to double the warranty provided by the original manufacturer for eligible items bought with their cards for up to a year. American Express has a similar promise to their cardholders.

Purchase Protection

If that shiny new smartphone or digital camera of yours gets stolen or damaged within 90 days of purchase, your credit card issuer could have a purchase protection program that insures you for the loss of a covered purchase. World MasterCard cardholders’ purchases are covered up to $3,000 per claim with a maximum of $20,000 over a 12 month period under this promise. You don’t get this promise for goods bought with cash, so if you want peace of mind, you could swipe your credit card at the cashier instead of paying cash for your purchases to get this coverage. American Express and Discover have similar programs for their cardholders.
These are just three of the instances when it could be wiser to use your credit card instead of cash to pay for something. Getting rebates for purchases are always a good thing and credit card holders get to enjoy this benefit. Credit card holders also enjoy peace of mind that their purchase could be covered by a purchase protection promise from the credit card issuer. If you’re on holiday somewhere exotic like Malaysia for example and you want to snap pictures with your new digital camera, it’s good to know that that camera is insured against theft or accidental damage.
This article is written by CompareHero.my, the most comprehensive financial comparison service in Malaysia.  Compare credit cards, broadband plan, and others at a competitive price.
Updated: November 1, 2017 — 2:32 pm

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