Personal finance columnist Gregory Karp recently advised his readers in a Chicago Tribune piece that credit cards offer certain consumer protections like leaving shoppers liable for as little as $50 when fraudulent transactions are committed.
This is a common point among personal finance experts who note that credit card companies are more likely to take an aggressive stance against fraud because shoppers are borrowing their money, while with debit cards, shoppers are using their own money.
Karp also noted that some credit cards will offer price protection policies and extended warranties for some purchases, and in some cases, even if a consumer accidentally damages the product in question. Other benefits he cites include cash reward programs and help with purchasing disputes.
However, consumers need to weigh things carefully when deciding whether credit cards provide them with a greater benefit than cash does. First, ongoing economic conditions have led many lenders to scale back rewards programs for most customers, with the exception being those willing to pay for such benefits or who have the highest credit scores.
Recent changes in federal credit card laws also make this a good time for consumers to check up on their account terms because lenders have been implementing a variety of new fees and profit-generating measures to replace revenues they used to generate from high interest rates and penalty fees.
With these things in mind, credit card purchases do have their place for many consumers, especially when it comes to expensive electronic items, but otherwise, cash and debit cards may still be a better bet in the long run for those working hard on debt management problems.
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