How to Use Your Credit Card for Everything

Man paying for transaction with credit card
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Credit cards have such a bad reputation that most people wouldn’t consider using a credit for card for everything. But, there are some benefits that make using your credit card as your main method of payment worth it.

Using your credit card (responsibly) improves your credit score. Active – and responsible – credit card use helps you build a good credit score. After months of using your credit card and paying the bill on time, your credit rating goes higher and higher allowing you to qualify for the lowest interest rates on new credit cards and loans.

The Benefits

You earn more rewards. The benefits of using your credit card for everything increase when you use a credit card that has rewards. You can rack up hundreds in cash rewards, miles, or points by using your credit card for all your monthly expenses. Of course, if your credit card has a cap on the amount of rewards you use, you may have to switch to another card to maximize the rewards you can earn.

You get purchase protection. Credit cards come with a number of perks, including purchase protection which will replace your purchase if it’s damaged or stolen. The catch is that you have to use your credit card to get the benefit. Using your credit card for everything automatically gives you purchase protection for all your purchases.

Ability to dispute transactions and withhold payment. Federal law gives you the right to dispute credit card billing errors, in writing, and to withhold payment for the amount you’ve disputed while the credit card issuer does an investigation.

You don’t get the same benefit when you use your debit card. Instead, the money will have already been deducted from your bank account and you’ll have to hope for a refund to get your money back.

How to Make It Work

Use just one credit card. Paying for everything with a credit card works best when you only one credit card rather than spreading your transactions across multiple credit cards.

That way you only have to worry about paying off one credit card balance rather than more than one.

Make sure you have enough available credit. Using your credit card for all your purchases requires you to have a credit limit large enough to support your spending. If you’re not there yet, continue using your credit card responsibly by making purchases and paying them in full and on time each month. With time, your credit card issuer will increase your credit limit. You can also pay off your credit card more often during the month to free up credit so you can continue spending with your card.

Don’t use your debit card. If the plan is to use your credit card for all your purchases, take your debit card out of the rotation. What happens when you use your debit card is that you reduce the balance in your checking account and make it harder to pay your balance in full.

Pay your balance in full each month to keep from being in debt. Leaving any part of your balance means you’ll have to pay interest and it deducts from the credit you have available. This is one of the most important rules to follow if you plan to use your credit card for everything.

Making it work

It requires a lot of self-discipline.

You can’t spend to your heart’s content just because you’re using your credit card. You still need to make a budget and keep your spending within a reasonable amount.

Some companies may charge a fee for using your credit card. You should be able to pay most of your bills with a credit card. However, some of these may charge an additional fee for using your credit card. In this case, use your checking account for these purchases.

You can’t pay a credit card with another credit card. This is one why it’s important that you use just one credit card for everything if you want to follow this plan.