I'll start by saying that I'm always amazed when friends of mine consistently make purchases big and small with cash or debit cards. This is a commonly prescribed strategy for those who haven't shown the greatest financial restraint in the past. I understand that for many, having instant access to credit is a bad idea, but for those with proven self-restraint spending on your credit card provides a great rate of return.
The most obvious reason to use your credit card whenever possible is to increase the rewards you receive for spending. This may be in the form of Cashback, Travel Rewards, or a branded rewards program. In all cases, you have spend money to make money. To be clear, I'm not advocating spending more than is necessary, or you've budgeted for. I am advocating that if you're going to spend money, you may as well be rewarded for it.
In addition to incentives for spending, many credit cards also provide a number of included insurances when you use them to make purchases. The obvious examples are extended warranties, protection from theft and damage for electronics, and rental car insurance. When you add up the cost of securing similar coverages through the store or rental company, using your credit card is the best option. In addition, some cards provide price protection for some purchases. Keep in mind that if you don't know what your coverages are, you can't take advantage of your card benefits.
These benefits all sound great, and they combine to add significant value to your planned purchases. However, the advantages of using your credit cards are quickly wiped out if you carry a balance. The high interest rates that credit card companies charge pay for all of the incentives to card users, but that doesn't mean that you have to be the one that is paying for them.
