When I first received my debit card I thought, “This is amazing.” I could access my bank account with a swipe of my card without having to write a check or carry around cash. There was always an ATM right around the corner if I ever needed cash. I didn’t see any downside to using this magical card. If only I had known the benefits of using a credit card…
I tried to convince my parents that they needed a debit card too. Otherwise, they couldn’t survive. They would normally flatter me and listen to my spiel. Then, they would usually respond saying they didn’t want to deal with the mess that would happen if their debit card was ever stolen.
Looking back, utilizing my debit card exclusively was not very smart. I have no idea how I didn’t experience identity theft or even worse, somebody emptying out my bank account. Although I didn’t have much money in my account to actually drain. But I digress.
Debit Card Disaster
I use my credit card exclusively now because I once had an unforgettably poor experience when using my debit card. I was double-charged at a restaurant and had to jump through too many hoops to get the issue resolved.
This incident is forever ingrained in my mind. A bunch of coworkers and I got together for lunch at a restaurant right around the corner from us. It was a cheap meal and not particularly good from what I remember. We ended up splitting the bill four ways and then left vowing not to return. And that was before we realized the double-charging madness.
To add insult to injury, they ended up double-charging everyone in the party. Whether it was a system error or the waiter trying to get one over on us, my friends were smarter than I was because they had used credit cards. Their credit card companies were able to quickly resolve the issue for them through a phone call.
I, on the other hand, was required to fill out forms attesting that the I wasn’t committing fraud. Then the bank department responded that it would take three to four weeks to review the issue and make a decision. This was all over a $10 meal. It hardly seemed worth the effort of filing numerous forms and waiting on a bank specialist to review the matter. I’m sure it costed the bank more money to refund me after all that paperwork than the amount of the refund itself.
That incident motivated me to start using my credit card almost exclusively for purchases. Although, I still check my bank account on a weekly basis to ensure that nobody has stolen my dormant debit card to make purchases. While I have not run into any further problems with my debit card, I have dealt with fraudulent charges with my credit card. They have been easy fixes though because of fraud protection.
Credit Card Pros
Now that I primarily use a credit card to pay for expenses, I have learned about additional services that most credit card companies provide that most consumers do not know about. Here are four of the best reasons to use a credit card.
Along with fraud protection, many credit cards offer free extended warranties. Often times, these warranties are a year or more depending on the purchase. This means if you have a Samsung or iPhone, its warranty could be extended an additional year. You can now relax knowing you might have additional coverage if you drop or damage your phone.
Another thing that isn’t well advertised is that credit card companies offer free purchase protection. Depending on the credit card company, you can receive coverage between $500 and $1,000 for theft and damage of your purchased item within 90 days.
Rental Car Coverage
Did you know that your credit card also offers rental car coverage? No need to waste money paying for collision damage waivers or loss damage waivers, which often increase the price by $10 to $30. Besides, if you own a car, you have car insurance through your insurance company.
Finally, did you know buried in the fine print, that some credit card companies will offer travel insurance for free? This includes protection if you miss a flight because of an unfortunate incident that lands you in the emergency room. Additionally, if your baggage is lost, depending on how long the baggage is missing, you can potentially be reimbursed by the credit card for the excess of what the airline company offers. While this is an extensive list of features, NerdWallet will be able to show you exactly which credit cards offer the best protections for you.
I can’t say that I’ve been able to use every one of these benefits, but it’s nice knowing that they are available if I ever need them in the future. Do you still use a debit card? Or strictly cash? Share your thoughts below.