Target Store Ohio

Why You Should Make Almost Every Purchase with a Credit Card

Last week, 40 million Target shoppers, myself included, had their payment data stolen. Whether you used a credit or debit card, if you paid with anything but cash at a Target store, your data may have been stolen.

Cash Is Silly

Really, who uses cash anymore? Not me. Not many people I know. Unless you are overcoming a serious debt issue and like the envelope budgeting method, never use cash unless you absolutely have to.

Think about the downsides of cash. If you lose cash, it’s gone. No recourse. If you use cash, you don’t have good records. If you use cash, you don’t get rewards. If you use cash, you are not building credit (you don’t have to use a card to build credit, but you need to have a card in good standing).

You get the idea.

Debit Cards are a Bad Idea

Debit cards are a bit better than cash, but not much better. There are a handful of reasons why. The biggest is that your card is linked right into your bank account.

In the big card data theft at Target, people who used a debit card are at the worst risk. If someone steals your account number and uses it, the money vanishes from your bank account. This can lead to bounced checks, fees, costs, and hassles.

Being a card, you are able to get the money back, but it is a lot of work. And you don’t just get off scot-free. You may still get stuck with fees.

Credit Cards are Safest

I was one of those Target shoppers, but I am not worried at all. Even if my card is one of the 5% estimated cards that will be used, which is still 2 million cards, no problem.

Why? If it is used, the banks just take the charge off of my card and I fill out a form legally acknowledging that the transaction was fraud. That’s the entire cost to me, just a few minutes of my time.

In fact, I have had my card number stolen in the past. My card was once used in Puerto Rico at Walmart. I certainly would have rather been in Puerto Rico than where I was, and I am jealous of the free trip my card number made. However, it didn’t cost me anything.

That is just one of a handful of stories where my card info was somehow stolen and I wasn’t liable. No big deal. No cost to me.

Big Rewards

Another important reason to use a credit card instead of a debit card or cash: rewards. I took a trip to Israel for about $70 each way. I flew to Portland for $5. Las Vegas, $5. I have not paid full price for a flight in about two years.

It wasn’t a cash back credit card that made this happen. It was a combination of several miles and points cards that made it happen. Ever since I took a trip to London, Paris, and Amsterdam for half price, I have been an enthusiastic travel hacker trying to see the world for free, or almost free.

Other Benefits

In addition to sweet rewards and fraud protection, there are other sweet benefits of using a credit card. Depending on your card, those include a free concierge service, price protection, extended warranties, lost luggage protection, other travel protection, rental car insurance, and a whole lot more.

Be sure to read through your card benefits to make sure you are not leaving anything on the table.

How Do You Pay?

What do you use to pay for purchases? Why? Did this post make you think twice? Please share in the comments.

Image by Nicholas Eckhart / flickr

6 thoughts on “Why You Should Make Almost Every Purchase with a Credit Card”

  1. I completely agree with you on this. I hardly ever use cash now a days. I don’t see the point of it. As you stated above I rather get the points, rewards and cashback. My husband was a little worried about this target situation and I told him we don’t need to worry because we use our credit to pay for almost everything.

    1. Sometimes when I get stuck using cash, I get really mad. I have made a point to avoid cash only businesses. When even most food carts and mobile businesses can take a card with Square or something similar, there is no excuse any more.

  2. We choose to make almost all of our major purchases using our credit card, we aren’t really concerned with security leaks but instead it comes down to the rewards. I should get something more than just the item when I make a purchase, and with a good credit card that is exactly what I get. I would say though, that there are times when paying in cash is a huge advantage, if it allows you to score a better deal through negotiation.

    1. I have been able to negotiate what I pay with credit cards before, but it has been rare. It is much more common for me to haggle with cash. I’m usually not at haggle friendly places, but when I go to a market, I always have a little cash in case I need it.

    1. My new landlord told me we can pay rent with a card, big miles win! I have not looked yet, but I hope there’s no extra fees for paying that way.

      I use Personal Capital and Mint to monitor my credit card transactions as they come through. I have caught problems before and was able to get it all refunded with no problems.

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