- A credit card lessens the chance that you will be a victim of fraud. If you carry large amounts of cash, you could lose it or have it stolen. If someone steals a check from you and cashes it or fraudulently, your money will be gone until a bank investigation is complete. A debit card has the same problem as a check. If your debit card is stolen, a thief can use it to make purchases. Although you will most likely get your money back, you have to wait for a completed bank investigation. The lost funds could delay your timely payment of bills.
- Most cards limit your liability for fraudulent credit card purchases to a small dollar amount. For example, if your card has a $50 liability limit and an identity thief purchases a $4,000 computer system using your card, you are only be liable for $50.
- Some credit card companies provide you with bonuses and rewards. For example, the University of Rhode Island's Bank Of America Credit Card with Worldpoints offers unlimited cash rewards, airline travel with no blackout dates, brand name merchandise, car rentals and hotel stays
- A credit card provides an easy way to keep records of all of your expenses, including those that are tax deductible. The complete records a credit card provides makes it less likely you will miss any tax deductions. To track and summarize expenditures, you can simply summarize expenditures from your monthly statements or get an electronic download of your card purchases and sort them by category using a spreadsheet program.
- If you do not have the discipline to control your spending with credit cards and make sure you fully pay off each month's bill, you may not want to use any credit cards. The benefits can quickly be offset by the added interest you will have to pay.
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