New credit card users may ask themselves, “Should I use my credit card for everything?” or “Should I use a credit card at all, unless it’s an emergency?”

There is no one-size-fits-all answer to this question. It depends on your personality, financial habits and spending patterns — and even the nature of a particular purchase may come into play. What should you know when considering using your credit card frequently?

1. Consider the Benefits of Credit Card Use

2. Consider the Risks

3. Consider the Effect of Carrying a Balance

4. Consider the Fees

1. Consider the Benefits of Credit Card Use

Using a credit card, instead of cash or a debit card, can provide you with significant benefits.

Convenience. The jury is not out anymore on this one: Credit cards are more convenient than cash, especially now that almost everyone accepts them. Carrying and using a small piece of plastic saves time, while avoiding the hassle of paper money. In addition, you can use your credit card to shop online.

Security. If your credit card is lost or stolen and the credit card issuer determines that unauthorized purchases were made on the account, you may only be responsible for the first $50 (according to the Federal Trade Commission). Some issuers may not hold you responsible for unauthorized purchases, and if you report the lost or stolen credit card, the issuer may be able to close the account before it’s used. You can cancel it online or on the phone. In the case of Discover, if you misplace your card, you can even freeze your account to prevent new purchases, cash advances and balance transfers in seconds on Discover’s mobile app or website.* You can easily examine transactions and set up a dispute for charges you haven’t made. Try that with lost or stolen cash!

Rewards. Many credit cards offer rewards to attract potential customers. Cash back, travel rewards, points, miles — whatever reward currency you prefer, there is no reason why you shouldn’t get something back for things you need to buy anyway.

2. Consider the Risks

Fraud and hackers are risks associated with using a credit card; anything from cloning credit cards to identity theft can happen. For this reason, it’s important to consider what security features your card offers.

3. Consider the Effect of Carrying a Balance

When you’re wondering how best to use a credit card, this is the question you may want to answer first. In short, if you carry a balance, you should use your credit card as sparingly as possible, or you could quickly find yourself burdened by high interest debt. This is the case when that “emergency” mantra applies.

You may be able to calculate the interest and payoff time of any credit card with online tools, like the Credit Card Interest Calculator from Discover.

However, if you pay off your balance every month it might make sense for you to use your credit card to earn the rewards, like cash back, your credit card offers.

4. Consider the Fees

Are you disciplined and organized? You can avoid late fees if you pay at least the minimum payment due on time each month. Just be honest with yourself. If you know that you may have problems in this department, avoid using plastic or commit to becoming more organized.

Some companies, like gas stations, small stores, utility companies and others may charge an extra two to three percent fee for credit card payments (the same is typically true for the IRS and some municipal and other government agencies). Sometimes, these fees are worth paying for convenience’s sake or earning rewards; other times, you might be better off using a different method of payment.

With every credit card, self-discipline is the key. Whether you use credit cards sparingly or for everything you buy, make it a practice to track your expenses, always pay on time and not get in over your head.

Published March 10, 2021.

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.

Freeze It®: When you freeze your account, Discover will not authorize new purchases, cash advances or balance transfers. However, some activity will continue, including bills that merchants mark as recurring, 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.