Ever since the credit crunch, paying with plastic has become a pastime for many. Instead, they are opting to use good ol’ cash to pay for their purchases. While it’s true that doing so is a better way to manage your money, it may not be the safest.
Whether you love them or hate them, here are some of the ways credit cards can make your shopping a little bit safer.
If someone steals your cash, you’re out of luck. However if someone steals your credit card, you probably won’t be held liable for a cent. According to federal law, the most they can hold you accountable is $50 per occurrence. Although they’re entitled to the first fifty dollars, most credit cards don’t hold you liable for a penny. So, if someone steals your American Express Platinum card and takes a shopping spree at the mall, you won’t have to worry about it. The same can’t be said about cash.
Some of the top-tier cards (mainly American Express) offers free protection on your purchases. For example, the American Express Platinum Card will refund you for eligible purchases if they are a lost, stolen, or damaged during the first ninety days. Obviously this is a fantastic benefit to have, but unfortunately that card also carries an annual fee of $450… ouch!
If you pay with cash and lose the receipt, you might be screwed if you want to do a return. The great thing about card transactions (both debit and credit) is that there is a paper trail on everything you buy. So, most stores can pull up proof of purchase, even if you’ve lost your receipt. Some department store credit cards will even take it a step further and allow their cardmembers to return merchandise that normally wouldn’t qualify. For example, the Dillards credit card is rumored to allow its cardmembers to return almost anything, for any reason (at least, that’s according to posts on Credit Card Forum.
There you have it; a few of the reasons why it’s sometimes smarter to pay with plastic. However, if you have a problem managing your spending with credit cards, then it’s probably best to stay away from them. Alternately, you can use your debit card; it may not offer as many benefits, but at least there is still some degree of fraud protection.