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Should You Use Your Credit Card for Everything?

Last Updated: May 8, 2024
5 min read

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

  1. Using credit responsibly for most purchases can offer benefits like security, building credit history, covering bills, and earning rewards.

  2. 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.

  3. Consider using a credit card that meets your unique needs regardless of how often you charge.

Have you ever heard, "Only use credit cards for emergencies"? If so, you're not alone. But these words discount how using a credit card responsibly may be able to 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

Credit cards can be more convenient than cash, especially now that almost everyone accepts them. Credit cards reduce the need for paper money, such as the need to visit an ATM. And you can use your credit card to shop online. 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 bill's due dates. 

Setting up autopay 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.

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

Credit cards can help cover emergency expenses. If your car breaks down or you have unexpected medical bills, you may be able to 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 unplanned events.

You can rely on security

Credit cards offer a layer of protection you don't get with cash. 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. If you report your card lost quickly, the Consumer Financial Protection Bureau notes that it can help limit your liability for unauthorized transactions.

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 Discover mobile 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. 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 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 and rewards. But different credit cards fit different needs depending on your financial circumstances and credit history.

Someone just starting college may need help to build a credit history3 and might benefit from a student credit card. The Discover it® Secured Credit Card helps you build your credit history with responsible use.4 For someone with healthy credit and a penchant for exploration, a travel credit card may give them the best rewards. And some may benefit from a card with no annual fees. Shop around so you can apply for the best credit card for you.

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  1. Freeze it®: When you freeze your account, Discover will not authorize new purchases, cash advances or balance transfers (including checks). However, some activity will continue including charges from merchants where your card is stored or billed regularly, as well as returns, credits, dispute adjustments, delayed authorizations (such as some transit purchases), payments, Discover protection product fees, other account fees, interest, rewards redemptions and certain other exempted transactions.

  2. $0 Fraud Liability: An “unauthorized purchase” is a purchase where you have not given access to your card information to another person or a merchant for one-time or repeated charges. Please use reasonable care to protect your card and do not share it with employees, relatives, or friends. Learn more at Discover.com/fraudFAQ.

  3. Build credit with responsible use: Discover reports your credit history to the three major credit bureaus so it can help build your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build credit.

  4. Build credit with responsible use: Discover reports your credit history to the three major credit bureaus so it can help build/rebuild your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build/rebuild credit.

  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.