6 Occasions When It’s Smarter To Reach for Your Credit Card Than Cash
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Written by
Emily Sherman
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Edited by
Amen Oyiboke-Osifo
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Reviewed by
Jasmin Baron
Will you be paying with cash or credit today? It’s a question you’ve probably heard many times before, and you may not have put too much thought into it. But choosing the right payment method for the purchases you make can come with many benefits.
For some people, swiping a rewards credit card on every transaction is second nature. That way, you can rack up points or miles on your purchase, and if you pay off your balance in full each month, you don’t have to worry about interest charges. For others, however, paying with credit all the time can lead to the temptation to overspend. Plus, failing to pay back charges you accumulate can have a negative effect on your credit score.
No matter which camp you fall into, there are times when paying with a credit card is smarter than using cash or debit. Not only do credit cards frequently come with rewards potential, but they may also carry additional purchase or travel protections that can save you money if things go wrong.
Here are a few occasions when it’s wise to reach for your credit card over cash:
At Cashless Merchants
Sometimes, the way you can pay for a purchase isn’t up to you. These days, it seems more and more merchants won’t accept cash. Paying with a card is an obvious choice in these situations.
Choosing credit over debit can make sense, too. Credit cards often offer more comprehensive fraud protection than debit cards. In fact, most come with $0 fraud liability, which means that if your card is stolen and fraudulent purchases are made, you don’t have to pay for any of it as long as you report it promptly. Debit cards sometimes come with these protections, but not always. Under federal law, the maximum amount of fraudulent purchases you can be responsible for on a credit card is $50, while debit cards can come with a responsibility to cover up to $500, depending on how quickly you report the fraudulent activity.
If You’re Booking Travel
Whether you are booking a flight, hotel or rental car, reaching for a credit card when booking travel can be a good idea.
For one, hotels or rental car companies may require you to put down a credit card to cover additional purchases during your trip, like room service or toll charges. Reaching for credit may also offer you additional protections if things go wrong.
Several travel credit cards offer rental car insurance, for instance, which allows you to decline any additional coverage from the rental car provider and still be protected if you’re in an accident.
Travel credit cards may also come with a variety of different travel insurance protections for other dilemmas, such as lost luggage protection or trip interruption insurance. Check out the terms and conditions of any cards in your wallet for the protections you qualify for.
For Buying Big-Ticket Items
Travel insurance isn’t the only hidden perk you might find on a credit card. Other kinds of purchases can be protected too. Credit cards may include benefits such as purchase protection, which covers you against damage or theft, or an extended warranty. Though less common, some cards also include return protection, which features an extended window wherein if you try and return an item and the store won’t accept it, your card provider will cover some or all of the cost.
To make use of these protections, you have to put the purchase on your eligible credit card.
When Traveling Abroad
So you’ve booked an international vacation. How exciting! Time to pack your passport and get acquainted with the local customs and currency. Unfortunately, pickpocketing is prevalent in many popular tourist destinations, so carrying cash can be more dangerous than sticking to cards. But swiping your card abroad can trigger a foreign transaction fee each time, often to the tune of 3% per purchase.
Enter travel cards with no foreign transaction fees. The right card can waive extraneous charges, so you can rest easy.
While You’re Shopping Online
Besides the purchase and fraud protections mentioned previously, shopping with a credit card can add additional security to your purchases, especially when shopping online. Several credit cards allow cardholders to generate a virtual card number for online shopping, meaning your actual card number is never entered into the system.
In an Emergency
Life happens, and in the case of an emergency, you may not have the cash you need to cover an expense. Maybe you had an unexpected medical expense or home repair. Regardless of the reason, a credit card can be a useful tool to have in cases like these.
Of course, you’ll want to be careful with charging more to a credit card than you can afford to pay off. Most come with very high interest rates – the average as of February 2025 was over 21% – which can add to your balance and lead to a large debt. A 0% intro APR credit card can be a good option to avoid extra interest for a set period if you have enough time to apply before your purchase, but if you don’t, a balance transfer card can help you pay down existing credit card debt with a lower interest rate.
Bottom Line
The right credit card can offer all kinds of protections that make it a great choice for certain purchases. That said, you’ll need to pay off your balance in full each month to avoid racking up interest charges. For any purchase, it’s wise to weigh the pros and cons of your different payment options before reaching for your wallet.
