Staying away from credit cards seems like a noble thing to do. After all, 41% of American households carry some sort of credit card debt. Nationwide, credit card debt adds up to about $1 trillion.

 

With numbers like that, credit cards might sound like more trouble than they’re worth. But when used responsibly, credit cards can add significant value to your credit record. Here are some of the reasons why to get a credit card and how to avoid too much debt.

Best Credit Card Benefits

It can build credit

You could get fraud protection

You could get money for using it

It could give you travel deals

Helps you track spending

It helps with high credit card balances

It’s good for emergencies

1. It can build credit

If you’re just starting your credit journey (or starting over), using a credit card can help prove your creditworthiness. This demonstrates how responsible you are with credit.

 

Remember that being responsible with credit means you’re paying back your balance in full by your due date. Or, at the very least, you should be paying the minimum balance.

 

Because credit cards can help boost your credit score, they also can cause your score to drop. It’s important to pay them on time every month and keep your utilization as low as you can. Building your score can take awhile, but it can plummet quickly if you aren’t diligent about paying your balance on time every month.

2. You could get fraud protection

Many credit cards offer protection in case your card gets lost or stolen. If your credit card has been compromised, contact your lender. Usually, they are able to remove any purchases you didn’t make. With credit cards, you aren’t liable for charges you didn’t make, or at the most, up to $50, thanks to the Fair Credit Billing Act.

 

Making purchases with a debit card may not offer the same protection. And getting your cash stolen doesn’t guarantee you’ll get your money back.

3. You could get money for using it

Cash back rewards can earn you some money every time you swipe your card. And some rewards are bigger than others. Some cards have higher cash back rewards for dining out or filling up at the gas tank. You can expect to see as much as 3% or 5% on some cash back rewards offerings. For example, during certain months the Discover it® Cash Back Card offers 5% back on groceries, gas, or dining when you activate for the quarter they are offered in.

Other cards, such as the Bank of America® Cash Rewards Credit Card, offer 3% back on specific categories of your choosing, including gas and dining, as well as 2% back at grocery stores and wholesale clubs and 1% back on all other purchases. These are examples of great cash back rewards cards.

 

And most cards offer at least 1% back on every purchase you make. Every little bit goes a long way, so if you’re making many little purchases, you can still see money in your account. When searching for a credit card, find one that has cash back offers to make sure you’re getting money back every time you use your card.

4. It could give you travel deals

Having a credit card with travel-specific rewards can net you major perks. Some cards offer points that can be redeemed for in-flight freebies that you would otherwise pay for and after enough purchases, you may be eligible for free flights. The Bank of America® Travel Rewards Credit Card even offers 25,000 bonus points after making at least $1,000 in purchases in the first 90 days of account opening, which comes out to $250 you can use toward your travel. Additionally, many cards have deals with hotels to save when you book a room.

 

Using a credit card when traveling also helps when traveling abroad. Some cards waive the foreign transaction fee, such as the Discover it® Miles that also offers unlimited 1.5X Miles for every dollar spent on all purchases. Other travel cards, however, have the fee tacked on when you make a purchase outside of a U.S. bank.

Man enjoying his credit card benefits by travelling

5. Helps track your spending

If you’re using many different payment methods wherever you go, it can be easy to lose track of your spending. Using a credit card can help that.

 

Your credit card transaction list can show you where your money goes in one easy-to-read list. If you’ve been unsure about how to get your spending on track, seeing where it goes through your credit card purchases can help. Once you see where your money goes, you can fix your budget and avoid frivolous spending.

6. It helps with high credit card balances

If you’ve ever struggled with paying down credit card debt due to high interest, you may want to look into a 0% intro APR balance transfer. The terms vary, usually around 12 to 18 months, but any extra time helps. A few good cards to look into in this regard are the BankAmericard® Credit Card and Discover It Balance Transfer card that offer 18 months 0% APR, or the US Bank Cash+ Visa Signature Card that offers 12 months 0% APR plus cash back rewards.

 

A balance transfer allows you to pay down your credit card debt without any added interest at the end of the month. You can use this time to get rid of your major debt.

 

Keep in mind that a balance transfer may not approve your entire balance to be transferred over. If that’s the case, you’ll still need to pay off your original balance on your older cards like normal. But if a balance transfer is approved, it should significantly reduce your original balance, making it easier to pay it off.

7. It’s good for emergencies

It’s easy to understand why you shouldn’t spend money you don’t have. But unexpected expenses or emergencies might require you to use a credit card if you don’t have enough cash on hand.

 

Imagine not being able to drive your car because you couldn’t afford emergency repairs. Or you can’t buy groceries because you’re short on cash. In situations like these, a credit card can be a lifeline.

 

Using a credit card responsibly can be a major boost to your credit score and creditworthiness. Make sure you make payments on time every month and don’t spend more than you can afford to pay back.