6 Reasons Why You Should Always Pay Using a Credit Card

Some people hate credit cards. They think credit cards are there to get their money. If you are not using them correctly, credit cards can ruin your finances, and most people I know have credit card debts that they can not pay.

But if you use credit cards correctly, they can be a great tool that can help you create wealth and enjoy benefits very few people can enjoy.

In this post, I will share why you should always pay using a credit card.

What is a credit card?

A credit card is a thin rectangular piece of plastic or metal issued by a bank or financial services company that allows cardholders to borrow funds to pay for goods and services with merchants that accept cards for payment.

In simple terms, this is a short-term loan that you can use to pay for goods and services, and at the end of the period, you will have to pay that loan without interest, but if you do not pay at the end of that period the credit card issuer will start charging your interest.

How a credit card works

The credit card works very simply: the credit card issuer ( the bank or financial institution) will issue a credit card with a limit of the money you can use (bank money), which you can use in 30-day cycles. Then, you will have 10 to 50 days to repay that money without any fee or interest.

6 Reasons Why You Should Always Pay Using a Credit Card

Here are the six reasons you should always pay using a credit card.

It has extra protection.

You are using the bank money, not your own, as in debit cards, so the banks or financial institutions must protect their money.

The credits cards will give you protection against unknown charges, they will give you extra warranty for the items you buys using them and some of them have protection against thef.

 I remember one year ago, I bought Airpods using my American Express card, and when I was going out for a run, I lost them. I called the Amex line and explained the situation, and they refunded me the money I used to purchase those Airpods.

My recommendation is to buy everything with credit cards when possible.

You are using other people’s money.

This is very important for entrepreneurs since credit cards are short-term, interest-free loans you can use to fund your business even if you do not have money.

Another day, I watched a video of this kid who got a credit card with a limit of 3000 USD; the kit started an Amazon FBA business.

When people order items from his store, he will buy the item from China using a credit card and ship it to the customer; then the customer will pay the money, and it would take about 30 to 45 days to get the money and he would take up to 60 days to pay back the money to the credit card.

When the money arrived from Amazon, it would pay the credit card balance and keep the profit, and it did this to build a million-dollar business.

I similarly use credit cards, I can set up and affiliate campaign to promote Clickbank products, use credit card to buy ads, Clickbank usually pay my between 14 to 21 days after the sale, so I will get my affiliate commissions before it is due to pay back the credit card company.

Of course, for this to work, you must have a winning campaign that makes you money, and it is not easy to create that.

I know there is a risk to this, you need to due your due diligence but if used correct you can use other people money to fund your business and start making money online.

You get rewarded using credit cards.

Credit cards companies makes more money when you are using their products, they make money from transaction fees and interests so the more you use the credit card the more money they make.

This is the reason many companies will incentivize you to use their credit cards, some cards they will give you a small percent of the amount of money you pay as a cash back, I get 5% when I use my credit card in restaurant or pharmacy.

Some of them will give you Amazon gift cards, travel miles and hotel discounts, unique experiences, and so on.

Just pick the card with the rewards you know you can enjoy and use it and much as you can, there is no need to pick a card that gives you travel miles if you never travel, pick one that suits your lifestyle. 

It will improve your credit score.

You know, in school, we used to have exams, and according to your score, they would determine which universities you had access to and which scholarship you could get.

As an adult, there is a different way to judge you, called the credit score; basically, it is a number between 450 and 860 that indicates how well you can manage money; the higher the number, the better you can handle money.

Using credit cards correctly will help you improve that number and give you access to business loans with lower interest rates, high-end credit cards, and so on.

Here, I write about how to improve your credit score.

Here, you can learn how to use credit cards to build wealth.

You can get to travel for free.

Most high-end credit cards offer very attractive rewards, especially for high spenders, and they will reward you with free travel packets ( airplanes or hotels) depending on how much you spend using their cards.

For example, American Express will give you a 2×1 flight ( you pay for one ticket, and they give you another ticket for free) inside Mexico if you spend at least $10,000.

The more money you spend, the more perks you will get.

Do not spend money just to to get a free flight, spend your money in things you would buy even without the credit card and then the reward will be free.

You get a lot of discounts.

As I said, credit card companies want you to use their credit cards. This is how they make money.

They will have discount deals with many retailers to make you spend money. For example, here in Mexico, we have a hot sale in the first week of June, and you can get up to a 70% discount.

For example, I bought a ticket to Istanbul for $2000 this week and got $400 as cashback for this promotion, which is an extra $400 in my pocket. Again, do not just buy things to get the cashback. Buy them when you need them.

Final words 

That is it. Those are six reasons why you should always pay using credit cards. To get those benefits, you need to use your card correctly, that is, pay the full debt before the due date so that you can never pay any interest while you enjoy the benefits.

It is stupid to get 5 percent of the cashback and pay 20 percent in interest, you will lose money and never be wealth.

If you want to learn more about using credit cards to create wealth, please click the link below.