Woman using her digital wallet to pay at grocery checkout

Should You Use Your Credit Card for Everything?

Last Updated: May 16, 2023

5 min read

Key points about: what you should use your credit card for

Using credit responsibly for most purchases can offer benefits like security, building credit history, covering bills, and earning rewards.
If you carry a balance, using a credit card for everything might not be for you. Risks include interest, fees, and lowering your credit score.
Consider using a credit card that meets your unique needs regardless of how often you charge.

Have you ever received the age-old advice, "only use credit cards for emergencies"? If so, you're not alone. But these words of wisdom discount how using a credit card responsibly can improve your financial health. So what should you use your credit card for? The answer largely depends on your financial habits and the nature of your purchases. Let's examine what you need to know when considering using your credit card for everything.

Benefits of using a credit card

The jury is no longer out: credit cards are more convenient than cash, especially now that almost everyone accepts them. Credit cards eliminate the hassle of paper money, such as the need to visit an ATM. And you can use your credit card to shop online—a near must in today's digital landscape. But what are some other advantages of using a credit card? Here are a few to consider before making your next purchase:

You can set up automatic bill pay

A credit card can help cover your monthly bills when payday doesn't align with your bills’ due dates.

Setting up automatic payments using your credit card can take the guesswork out of paying your bills on time. As long as you pay the statement balance on your credit card bill each month, using your credit card as a money management tool is an excellent way to stay on top of your finances and payment history.

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You can build a credit history

If you use your credit card responsibly, you can build a credit history, and a good credit score can help you get approved for loans with better terms and lower interest rates. This financial strategy can pay off, especially with significant purchases like a car or home.

You can cover emergency expenses

Here’s where that age-old advice offers some truth: credit cards can help cover emergency expenses. If your car breaks down or you have unexpected medical bills, you can pay the cost on your credit card over time. Access to credit can be a lifesaver if you don't have the cash on hand for the unplanned.

You can rely on security

Credit cards offer a layer of protection you don't get with cash or debit cards. For example, if your credit card is lost or stolen, you can contact your card issuer to cancel it immediately, possibly closing the account before anyone even uses it. Once you report your card lost or stolen, federal law protects you from owing on any fraudulent charges, and you’ll never pay more than $50 for unauthorized charges made before reporting the loss or theft.

Did you know?

As a Discover^® Cardmember, if you misplace your card, you can freeze your account in seconds with an on/off switch either on the mobile app or website to prevent new purchases, cash advances and balance transfers.¹ You can also use the app to examine transactions and set up a dispute for charges you haven't made. And you're never held responsible for unauthorized purchases on your Discover Card.²

You can earn credit card rewards

No magic trick lets you multiply your money every time you pay with cash or a debit card. But many credit card companies offer rewards on everyday purchases that can add up to some serious savings. Be it cash back rewards or miles—why shouldn't you get something for things you need to buy anyway?

Risks of using a credit card

From the rewards to the convenience, there's no denying the perks of a credit card. So why even question if you should use your card for everything? Depending on the circumstances, using your credit card for everything could cost you more money in the long run. Consider these risks when determining what you should use your credit card for:

You can carry a credit card balance

If you're not careful, it's easy to charge more on your credit card than you can afford to pay back. And if you carry a credit card balance from month to month, you could end up paying a hefty amount of interest. You can use the Discover credit card interest calculator to calculate the interest charges you may pay on a credit card based on your monthly payments and payoff time.

You can hurt your credit report and score

A high amount of revolving debt, such as personal loans and credit card debt, can impact your credit utilization ratio (the total amount of debt you have compared to your total credit limit across all your revolving credit accounts). So if you're using a lot of your available credit, high credit utilization can show up on your credit report and lower your credit score, possibly making it harder to borrow in the future.

You can become a victim of fraud

If your credit card number falls into the wrong hands, you can become a victim of fraud. Once criminals have your information, anything from racking up charges and fraudulent account opening to cloning credit cards and identity theft can happen. That's why it's crucial to understand the security features of a credit card.

You can incur fees

You'll probably incur a late fee if you don't pay your credit card's monthly minimum payment on time. Late fees can vary depending on your card issuer and the amount of your outstanding balance. And if you're frequently late on your payments, you could pay hundreds of dollars in late fees over time.

What credit card should you use?

We've established the benefits and risks of using a credit card, but what about choosing the right credit card for you? After all, if you plan to use your credit card for everything, you should ensure you’re getting the most out of it.

If you’re responsible with your credit card, using your card for everyday purchases can offer convenience, rewards, and confidence. But different credit cards fit different needs depending on your financial circumstances and credit history.

Someone just starting college may need help building a credit history and might benefit from a student credit card. The Discover it Secured Card can help you build credit with responsible use.³ For someone with healthy credit and a penchant for exploration, a travel credit card may give them the best rewards. And anyone can benefit from a card with no annual fees. Shop around so you can apply for the best credit card for you.