Everyone has their preferred way of paying for things. Some like using cash while others prefer contactless payment methods like Apple Pay or Google Wallet. But other than earning travel rewards or cash-back, there are several other significant benefits of paying with a credit card.
While debit cards and cash offer consumers limited benefits, using a credit card can help protect you against purchases that go awry. A credit card is guarded from fraudulent activity and some offer benefits like travel insurance and return protection.
CNBC Select breaks down the benefits of paying with a credit card over a debit card or cash.
What we'll cover
Your money is protected
When you spend on a debit card, the funds are taken directly from your checking account. Now what if your debit card, or even simply the information of your debit card, falls into the wrong hands? This leaves your checking account, your lifeline to pay bills or withdraw cash from an ATM, vulnerable.
Depending on the timeline of when you report it, you could be held liable for some of the damages. According to the Federal Trade Commission (FTC), if you report your debit card lost or stolen before any malicious charges are made, you won't be responsible for any charges made without your authorization. If it's within two business days that you report the loss, you can be held responsible for up to $50. If it's more than two business days but within 60 days of your last statement, your loss can be up to $500. If it's beyond 60 business days, you could be held liable for all charges.
However, if someone makes unauthorized transactions with your debit card number, but you did not lose your card, you are not liable for any charges if you report them within 60 days of your statement being sent to you.
The trouble with this happening is that even though you might not be responsible for those charges, if a fraudster drains your checking account, this could send ripple effects throughout your personal finances. If you are unable to pay other time-sensitive bills, you could incur late payment fees for things such as a mortgage or personal loan. Late and missed payments can have a negative impact on your credit score.
Pro tip: There are a number of services, such as CreditWise® from Capital One and Experian free credit monitoring that let you monitor your credit for free.
With a credit card, fraudulent charges are much less of a concern, as it is not your money — but rather your credit. And nearly all credit cards come with zero liability protection.
Ensuring your purchases are safe
You've likely experienced buyer's remorse at one point or another. It can be for a number of different reasons, from being displeased with the quality of the product, to the vendor not delivering on what it promised. When you purchase with cash or a debit card, your protections mostly rely on the retailer's return policy. With a credit card, you won't be at the whim of the vendor, there are other avenues you can take to rectify your purchase.
If you've used a credit card to buy something, you can call your credit card issuer to dispute the charge. Sometimes called a chargeback, this is where you contact your bank to notify them that a purchase was never received or arrived damaged.
This will typically mean filling out a short form, describing what you purchased, and why you aren't satisfied with the purchase. This can also be done if you never received an item, if you were charged an incorrect amount or if the business charged you for other items or services you didn't agree to. The card issuer will then reach out to the vendor to follow up and make a decision if you should be refunded.
Consumer protections
In addition to disputing purchases, credit cards come with a long list of consumer protections. However, not all credit cards offer all of these, so it is important to find the best credit card for you by looking into all of their benefits.
Here are a few consumer protections credit cards provide:
Purchase protection
Purchase protection can reimburse you for damage, loss or theft of items you've recently purchased.
For example, the Chase Sapphire Reserve® card offers one of the longest coverage periods, offering protection for 120 days from the purchase date (see rates and fees). Many items qualify for this coverage, but some notable exclusions are perishables, collectibles/antiques, computer software and used/pre-owned items.
The Chase Sapphire Reserve® is a standout premium credit card with plenty of luxury perks and statement credits to justify its annual fee.
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn 150,000 bonus points after you spend $6,000 on purchases in the first 3 months from account opening.
- Get $3,000 in annual value with Sapphire Reserve.
- Earn 8x points on all purchases through Chase TravelSM, including The EditSM and 4x points on flights and hotels booked direct. Plus, earn 3x points on dining worldwide & 1x points on all other purchases
- $300 annual travel credit as reimbursement for travel purchases charged to your card each account anniversary year.
- Access over 1,300 airport lounges worldwide with a complimentary Priority PassTM Select membership, plus every Chase Sapphire Lounge® by The Club with two guests. Plus, up to $120 towards Global Entry, NEXUS, or TSA PreCheck® every 4 years
- Get up to $150 in statement credits every six months for a maximum of $300 annually for dining at restaurants that are part of Sapphire Reserve Exclusive Tables.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Coverage, Lost Luggage Insurance, no foreign transaction fees, and more.
- Get complimentary Apple TV+, the exclusive streaming home of Apple Originals. Plus Apple Music — all the music you love, across all your devices. Subscriptions run through 6/22/27 — a value of $288 annually
- Member FDIC
Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
Return protection
Some merchants do not have flexible return policies. But with certain cards, if you make a purchase, attempt to return the product for a refund, and are refused, this would activate the return protection policy.
Several American Express cards, including the American Express Platinum Card®, offer this policy. If you attempt to return the item within 90 days of purchase and the merchant refuses, American Express may refund the full purchase price up to $300 per item and up to $1,000 per calendar year in claims.
Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details.
The American Express Platinum Card® is a premium card loaded with annual statement credits, entertainment benefits, extensive airport lounge access, elite status perks and more. (Enrollment required for select benefits mentioned)
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- You may be eligible for as high as 175,000 Membership Rewards® points after you spend $12,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you're approved and find out your exact welcome offer amount – all with no credit score impact. If you're approved and choose to accept the Card, your score may be impacted.
- Get more for your travels with 5X Membership Rewards® points on all flights and prepaid hotel bookings through American Express Travel®, including Fine Hotels + Resorts® and The Hotel Collection bookings. You earn 5X points on flights purchased directly from airlines or through American Express Travel® on up to $500,000 on these purchases per calendar year.
- With over 1,550 airport lounges - more than any other credit card company on the market* - enjoy the benefits of the Global Lounge Collection®, over $850 of annual value, with access to Centurion Lounges, 10 complimentary Delta Sky Club® visits when flying on an eligible Delta flight (subject to visit limitations), Priority Pass Select membership (enrollment required), and other select partner lounges.* As of 07/2025.
- $200 Uber Cash + $120 Uber One Credit: With the Platinum Card® you can receive $15 in Uber Cash each month plus a bonus $20 in December when you add your Platinum Card® to your Uber account to use on rides and orders in the U.S when you select an Amex Card for your transaction. Plus, when you use the Platinum Card® to pay for an auto-renewing Uber One membership, you can get up to $120 in statement credits each calendar year. Terms apply.
- $300 Digital Entertainment Credit: Experience the latest shows, news and recipes. Get up to $25 in statement credits each month when you use your Platinum Card® for eligible purchases on Disney+, a Disney+ bundle, ESPN streaming services, Hulu, The New York Times, Paramount+, Peacock, The Wall Street Journal, YouTube Premium, and YouTube TV when you purchase directly from one or more of the providers. Enrollment required.
- $600 Hotel Credit: Get up to $300 in statement credits semi-annually on prepaid Fine Hotels + Resorts® or The Hotel Collection* bookings through American Express Travel® using the Platinum Card®. *The Hotel Collection requires a minimum two-night stay.
- $400 Resy Credit + Platinum Nights by Resy: Get up to $100 in statement credits each quarter when you use the Platinum Card® to make eligible purchases with Resy, including dining purchases at U.S. Resy restaurants. Enrollment required. Plus, with Platinum Nights by Resy, you can get special access to reservations on select nights at participating in demand Resy restaurants with the Platinum Card®. Simply add your eligible Card to your Resy profile to book and discover Platinum Nights reservations near you.
- $209 CLEAR+ Credit: CLEAR+ helps get you to your gate faster by using your face to verify you are you at 55+ airports nationwide. You can cover the cost of a CLEAR+ Membership* with up to $209 in statement credits per calendar year after you pay for CLEAR+ with your Platinum Card®. *Excluding any applicable taxes and fees. Subject to auto-renewal.
- $200 Airline Fee Credit: Select one qualifying airline and then receive up to $200 in statement credits per calendar year when incidental fees, such as checked bags and in-flight refreshments, are charged by the airline to the Platinum Card® Account. American Express relies on airlines to submit the correct information on airline transactions to identify incidental fee purchases. If you do not see a credit for a qualifying incidental purchase on your eligible Card after 8 weeks, simply call the number on the back of your Card. Qualifying airlines are subject to change. See terms & conditions for more details.
- Start your vacation sooner, and keep it going longer. When you book Fine Hotels + Resorts® through American Express Travel®, enjoy noon check-in, when available, and guaranteed 4PM check-out.
- $300 lululemon Credit: Enjoy up to $75 in statement credits each quarter when you use the Platinum Card® for eligible purchases at U.S. lululemon retail stores (excluding outlets) and lululemon.com. That's up to $300 in statement credits each calendar year. Enrollment required.
- $155 Walmart+ Credit: Receive a statement credit* for one monthly Walmart+ membership (subject to auto-renewal) after you pay for Walmart+ each month with the Platinum Card®.* Up to $12.95 plus applicable local sales tax. Plus Ups not eligible.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- $895 annual fee.
- Terms Apply.
- See Rates & Fees
Balance transfer fee
N/A
Foreign transaction fee
None
Travel insurance protection
Travel insurance has become an increasingly popular benefit for consumers after Covid-19 induced massive travel restrictions and cancellations. By having a credit card like the Chase Sapphire Preferred® Card (See rates and fees) your trip is protected as long as you pay for your travel expenses with the card. The policy comes with several coverages, such as trip cancellation and interruption insurance, baggage delay insurance and trip delay reimbursement.
The Chase Sapphire Preferred® Card packs a punch for a $95 annual fee card, offering annual travel credits, comprehensive travel protections and more.
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
- Enjoy benefits such as 5x on travel purchased through Chase TravelSM, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases
- Earn up to $50 in statement credits each account anniversary year for hotel stays through Chase TravelSM
- 10% anniversary points boost - each account anniversary you'll earn bonus points equal to 10% of your total purchases made the previous year.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Complimentary DashPass which unlocks $0 delivery fees & lower service fees for a min. of one year when you activate by 12/31/27. Plus, a $10 promo each month on non-restaurant orders.
- Member FDIC
Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
Cell phone protection
By simply paying for your cell phone bill with the right credit card, your mobile device can be covered up to a specified amount for damage, loss or theft. There is likely a deductible if you file a claim, and documentation may be needed by the insurance company.
The Wells Fargo Autograph® Card offers up to $600 worth of cell phone protection when you pay your monthly cell phone bill with your eligible card, and has a relatively low deductible of $25. This covers "damage to, theft of, or involuntary and accidental parting of a cell phone" and you are eligible to make up to two claims per 12-month period provided your cellphone is qualified.
The Wells Fargo Autograph® Card offers generous bonus spending categories and lets you transfer points to airline and hotel partners, which is rare for a credit card with no annual fee.
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- Earn 20,000 bonus points when you spend $1,000 in purchases in the first 3 months - that's a $200 cash redemption value.
- Earn unlimited 3X points on the things that really add up - like restaurants, travel, gas stations, transit, popular streaming services, and phone plans. Plus, earn 1X points on other purchases.
- $0 annual fee.
- 0% intro APR for 12 months from account opening on purchases. 18.49%, 24.49%, or 28.49% variable APR thereafter.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Redeem your rewards points for travel, gift cards, or statement credits. Or shop at millions of online stores and redeem your rewards when you check out with PayPal.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
Balance transfer fee
3% intro for 120 days from account opening, then up to 5%, min: $5
Foreign transaction fee
None
FAQs
Why is it better to pay with a credit card?
Paying with a credit card not only provides you with an extra layer of security compared to a debit card, but rewards you with cash-back, redeemable points or travel miles. Some credit cards also have welcome bonuses in addition to other ongoing perks.
What are the advantages of paying with a credit card?
Paying with a credit card offers advantages like a grace period before your statement is due, fraud protection, opportunities to earn rewards, welcome bonuses and more.
What items should you not purchase with a credit card?
There are a few places you might be better off not using a credit card, such as an ATM as that is considered a cash advance that will immediately accrue interest. Additionally, some merchants may offer a discount to cash customers.
What should you think about when paying with a credit card?
Before paying with a credit card, make sure you afford the transaction and will be able to pay for it when the statement arrives as you wouldn't want to rack up high interest fees. You should also consider whether a merchant will charge you a fee for paying with a credit card.
Bottom line
Using a credit card correctly can turn it into a resource that can provide consumers with certain protections that other forms forms payment simply can't. However, they must be used responsibly and it is best to pay them off in full each month in order to avoid costly interest payments. If you can spend responsibly, the extra protections offered by credit cards rather than paying with a debit card or cash make them a worthwhile investment.
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For rates and fees for the American Express Platinum Card®, click here.
