When many of us think of credit cards, we don’t immediately think of ways in which they can enhance our lives and our finances. Too often, we see them as necessary evils, or as nefarious traps designed to hold us in financial bondage.

The flip side of that view, though, is that credit cards can actually improve your life and your finances. Believe it or not, there are ways that you can improve your life and even your money situation with theĀ responsible us of credit cards. Here are 5 ways that credit cards can be advantageous:

1. Credit Cards are Convenient

unused credit cardOne of the most annoying things having to do with money (at least in my book) is having to carry around a wad of cash. Even worse is writing a check. It’s inconvenient to be constantly getting cash, especially if you are making large purchases. And writing a check is an even bigger hassle. Credit cards are easier to use, they are accepted internationally, and you can use them for online purchases (although I like using PayPal better for online purchases).

2. Credit Cards Come with Protections

When someone runs off with your cash, it’s gone. You aren’t getting it back. With credit cards, you have some protection. If your credit card is stolen and used fraudulently, you aren’t liable for the charges. The same can’t be said for cash, since it’s gone the minute it is taken from you. There’s no replacing that cash. And, even though it’s a pain to deal with security breaches, at least you are protected from fraudulent purchases made with your stolen information.

3. It’s Easier to Travel with Credit Cards

This point goes back to convenience. It’s possible to find cards that don’t charge foreign transaction fees, and you don’t have to worry about changing your currencies. On top of that, many credit cards come with travel-related perks. You usually get baggage insurance, as well as car rental insurance, when you travel. Many credit cards also offer roadside assistance and concierge services that can come in handy while you’re on the road.

4. Better Manage Your Cash Flow with Credit Cards

As someone with a variable income, I find credit cards very helpful for managing my cash flow. I don’t always get my “paycheck” at the same time each month, since clients pay late, or there might be other issues. As a result, I rely on credit cards to ease my cash flow. Many of my bills are paid automatically via credit, and I buy my groceries with credit card. This leaves the checking account free for things like my mortgage payment.

I don’t have to worry about overdraft problems when I use credit cards to manage most of my cash flow. Then, I can pay on the credit cards when the money does make it into my checking account. It’s an easier way to proceed, especially when you have a variable income. Just make sure you don’t spend more than you can pay off. You don’t want to get caught paying interest.

5. Earn Rewards with Credit Cards

There are few things in life better than the cash back you can earn with credit cards — just for making regular purchases. If you use your credit cards as part of your regular spending, you can rack up the reward points without too much trouble. If you have a rotating card, or if you have a card that comes with tiered rewards, you can see even better cash back.

As long as you are careful to pay off your credit card each month so you aren’t paying a heft amount in interest charges, you can do quite well. I end up with a few hundred dollars in cash back each year, thanks to credit cards, and my son’s college fund gets a little shot in the arm — on top of what we pay regularly — due to our Upromise credit card (available in the United States).

Using credit cards properly to earn rewards is a great way to get free money, or to get free travel or merchandise. This can help you improve your finances, in addition to adding convenience to your life.

What do you think? Do credit cards enhance your life?



Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.