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Things You Should Always Pay for With a Credit Card

When you manage your credit cards properly, they can become powerful tools to help you gain perks, build your credit, and more.

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Always use a credit card to pay for travel

Do you use your credit card to cover your travel expenses? If not, you’re probably missing out. “It’s smart to use a travel rewards credit card with superior perks any time you book airfare, hotels, cruises, or other types of travel,” says Holly Johnson, credit card and travel expert with ClubThrifty.com. She explains that many premier travel cards offer benefits that can help you save money and protect you from financial losses. “Some examples, include trip cancellation/interruption insurance, baggage delay coverage, and trip delay reimbursement,” she says. You may also be able to take advantage of these credit card reward perks on your next vacation.

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Always use a credit card to purchase mobile phones

The next time you need to replace or upgrade your smartphone, don’t be so fast to pay in cash or finance the purchase with your mobile phone provider, as there may be some benefits to paying for mobile phones with your credit card. “Credit cards may offer extended warranties and theft and damage protection for the first 90 to 120 days after you purchase your phone,” says Lance Cothern, personal finance expert and founder of MoneyManifesto.com. You may even want to pay your monthly bill with your credit card as “some cards offer cell phone protection coverage if you do so,” he says.

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Always use a credit card to pay in advance for goods and services to be received later

When you purchase something in advance, it’s a good idea to pay with your credit card. In addition to travel reservations, this includes tickets to events and items to be shipped to you. This is important because, when you use your credit card to pay in advance for goods and services you’ll receive later, you’re protected by the Fair Credit Billing Act, which prevents you from having to pay for any goods or services not received, says Jason Steele, an expert in credit cards and travel rewards. “For example, if you paid for merchandise that was never shipped or a concert that was later canceled, your card issuer will refund the purchase in event that the merchant fails to do so,” he explains.

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Always use a credit card to pay any company that places a hold on your account

Did you know that certain types of companies, including car rental companies, hotels, and gas stations, will place a hold on your card before your actual transaction goes through? “When companies place a hold on your debit card, it could take several days to fall off your account after you complete the transaction,” explains Lee Huffman, travel expert and founder of BaldThoughts.com. “These ‘phantom charges’ could cause payments to bounce if your checking account is a little thin,” he explains. “Credit cards are better for these purchases because most people have plenty of available credit to tide them over until the holds are released.”

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Always use a credit card to pay for big purchases

Before you make your next big purchase, especially appliances or electronics, you should take a moment to see if any of your credit cards offer extended manufacturer warranties. “I’ve never had to use the benefit, but I like that it’s extra coverage for free,” says Louis DeNicola, a personal finance and credit writer. You may also benefit from price protection as well, says Chris Browning, founder of Popcorn Finance. “Many credit cards will issue a refund if you notify them of a price drop within the 60 to 120 days of the purchase date,” he says.

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Always use a credit card to pay for regular monthly bills

You’re already paying for bills like cable, electricity, and internet. Why not enjoy some additional points and miles from your payments. Lindsay Konsko writes for U.S. News & World Report that “the most obvious advantage of using your credit card to pay your monthly bills is the rewards you could rack up.” (It goes without saying, however, that if you’re not mindful about paying off your credit card bill each month, those rewards aren’t worth it.) Konsko goes on to say “another advantage of using your credit card to pay your bills is simplicity.” Consolidating multiple bills into a single payment helps people remember payments and avoid expensive late fees.

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Always use a credit card to keep business and personal expenses separate

If you’re a small business owner, it can help to have multiple credit card accounts—both for yourself personally and for your business. When you use a business credit card to cover company expenses, you can help simplify your business accounting, tax returns, and can even protect your personal credit from high credit utilization which could damage your personal credit scores. On the flip side, there are times when using your credit card for payment is a very bad idea.

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Good credit is its own reward

Perhaps the best reason to open a credit card and use it for purchases is that doing so has the potential to help you build better credit. Of course, you’ll need to manage your credit card account the right way, or the account could hurt your credit instead of helping it. Keep reading to find out 10 ways a good credit score could save you hundreds of dollars per month.