Credit cards are often seen as a way to access free things like gift vouchers, flights and other goodies simply by accruing points, but there are a few other reasons why consumers should also look to their credit cards for purchasing and these involve important consumer protections.
According to Roland
Bleyer, founder of creditcard.com.au
, Australia's largest independent credit card
comparison website, credit
cards also provide other benefits including travel insurance, proof of purchase records, fraud protection and consumer buying protections.
These are things that people don't really think about but they are some of the most important reasons to put certain types of purchases on your credit card.
Roland has put together a list of reasons why you should always put certain purchases on your credit card.
1. Tax deductable purchases
Purchases which are required for business purposes and can be claimed for tax purposes should be made by credit card. This means you will always have a record of the transaction online in your credit card statements which shows the vendor, day, time and amount of money spent. It is a great fall back in case you lose a receipt
2. Big ticket items
Any purchase that involves a fair bit of money should always be made by credit card. Electrical equipment such as computers, fridges, washing machines and other items can and do experience issues, sometimes, soon after buying them. If you encounter issues dealing with the retailer, you can go back through your credit card seeking a refund
3. Online purchases
Most people buy things online and usually have a good experience but from time to time things can and do go wrong. Sometimes items arrive and they are not as advertised, or they don't arrive at all. There is where you can use the dispute facility on your creditcard to deal with the issue and if the seller is unable to satisfy the bank's requirements, the funds are returned to you
4. Service provider purchases
Purchasing services, whether it be trades person services or the delivery of expert advice can often be a bit risky. Let's say you got some bathroom renovation work done and you paid the tiler by credit card. The work looked great for a week and then for some odd reason, the taps started leaking and the tiles started to lift. If you paid via EFT or cash or debit card, the funds are well gone. If you paid via credit card you have some level of protection built in. The service provider has to prove that the work has been done to a reasonable quality and you are satisfied. Any business that accepts payments via credit card operates in accordance with the strict requirements of the credit card provider and the provider can require monies to be returned to the buyer through the charge back dispute process
5. Recurring payments
We all subscribe to services that require us to pay a fee every month or year, whether it be for gym payments or a subscription service for something else. When we make payments via EFT, which is what these service providers prefer, payments just automatically keep coming out of our account. If we decide to cancel them and the provider is slow in ceasing the arrangement or for some reason we can't contact them, if these payments are made by credit card, we can simply contact our bank and deal with the matter that way rather than having to chase the service provider. If a call to the provider doesn't stop the payments from being taken out of your credit card, a call to your credit card provider will
6. Paypal purchases
Paypal likes its users to pay via their bank account. Don't. Make sure payments are made via Paypal using your credit card. Even though Paypal offers some level of dispute resolution, paying via credit card offers you an additional level of protection
“You should only use your credit card when you can afford to pay it off. Make the payments, then transfer the funds to pay off your credit card purchase as soon as possible. This way you can take advantage of reward points and other benefits. Whilst not getting hit with high interest.”