Credit cards and debit cards both let you easily make purchases without having to carry around cash or a checkbook. The difference is that when you use a debit card, the money comes directly from your bank account as soon as you make a purchase. When you use a credit card, instead of paying immediately, your purchase is charged to a line of credit, and you receive a bill later.

Both types of cards are beneficial, but credit cards offer several key advantages over debit cards. Aside from the obvious perk that you don’t need to pay right away, here are a few great benefits of using a credit card.

Build Credit

You need credit in order to get a good mortgage or auto loan. In general, loan applicants with a good credit history and a high credit score qualify for larger loan amounts and better interest rates.

Owning and using a credit card is the best way to build credit, but how you use your card is crucial. If you don’t pay your credit card bills on time, your credit can suffer, your card’s interest rate may increase, and you might have to pay late fees. On the other hand, using your credit card responsibly and consistently paying your monthly bills on time helps you build credit and raises your credit score.

If this is your first time using a credit card, a great way to get started is to simply use your credit card for one or two small purchases each month and pay your bill in full as soon as you recieve it. This is a good way to start building credit and get used to using your new card.

Rewards Programs

Many credit cards come with the option to earn rewards for the money you spend. For example, when our members use their Valley Credit Union credit cards, they earn rewards through a program called uChoose Rewards. If you use a Valley Credit Union credit card, you get to choose the rewards you earn from a long list of options, which include:

• 3 to 4 million merchandise redemption options
• Gift cards at more than 100 retailers that cover dining, entertainment, gas, travel, and retail
• Cash back

Protect Against Fraud

Credit cards don’t make you immune to fraud, but using them can add an extra line of defense. If someone gets hold of your debit card information, they have access to all the money in your checking account (or whichever account your debit card is connected to) until you or your bank notices the fraudulent activity.

With a credit card, no money goes out of your account until you pay your bill, and your bill will usually include an itemized list of all the purchases you made with that card. This makes it easy to identify fraud, and it also protects your bank account in the meantime.

Thinking of getting a credit card?

At Valley Credit Union, our credit card options are designed to help you save money, earn rewards, and protect your privacy and security. It’s a great option for anyone in Salem, OR or surrounding areas. Want to learn more? Don’t hesitate to get in touch. Contact us now!

About the Author

 Justin Roberts, Vice President of Lending

Justin Roberts is our Vice President of Lending and has been in the financial industry for over 18 years. He is an Oregon State University Graduate and has just completed Western CUNA Management School. When he is not focused on helping the members at Valley, you will find him coaching his two sons and volunteering his time to help develop the youth in our communities through sports.