3 Reasons to Use a Credit Card for Every Purchase

Lots of consumers are wary about using credit cards, and understandably so. The average credit card debt in the United States is nearly $6,000, which could cost you over $1,000 per year in interest. One of the best things you can do for yourself is avoid credit card debt.

But that doesn't mean you need to avoid credit cards entirely. If you use your credit card and pay the bill in full every month, you won't be charged any interest on your purchases. For example, if you spend $1,000 total, and then pay the full $1,000 balance by the due date, there won't be any interest charges.

If you can do that, it makes sense to use your credit card for as much of your spending as possible. Here's why.

1. If you ever have an issue, you can dispute the transaction

There are plenty of credit card perks available. Many cards offer rewards, sign-up bonuses, and spending credits, to name a few. While these get most of the attention, the thing I like most about paying by credit card is much simpler.

If you have a problem with a transaction, and the merchant won't help, you can dispute it. Here's what happens next:

• Your credit card issuer will give you a provisional refund for the transaction amount.
• Your card issuer will pass the dispute on to the payment network for your card (Visa, Mastercard, Discover, or American Express).
• The payment network will investigate based on the information provided by you and the merchant.
• If the payment network decides in your favor, the provisional refund becomes permanent.

You can also dispute transactions with a debit card, but the funds will be frozen during the dispute process. It's more convenient with a credit card, since that isn't connected to your bank account. If you pay by cash, on the other hand, you're at the mercy of the merchant if there's a problem.

I've had to dispute transactions over the years, and most of the time, it has been easy to get my money back. You do need to try to resolve issues with the merchant first before filing a dispute. When that doesn't work, it's nice to know your card issuer can help.

LEARN MORE: How to Dispute a Credit Card Charge

2. You'll be able to earn more cash back or travel points

The biggest advantage credit cards have over other payment methods is their rewards programs. If you have a good credit score, you could qualify for cards that earn quite a bit back on what you spend.

For a straightforward example, the Wells Fargo Active Cash® Card earns 2% cash rewards on purchases and has no annual fee (see rates and fees). If you have that credit card and you spend $2,500 per month on it, you'd earn $600 in cash rewards per year.

That's just one option. There are also cards that offer higher rewards rates in bonus categories. If you're not sure where to start, here are a few lists focusing on different types of rewards:

• Best cash back credit cards
• Best gas and grocery credit cards
• Best travel rewards credit cards
• Best dining and restaurant credit cards

3. You could get complimentary extra protections, including purchase and travel coverage

Many credit cards provide free insurance on eligible purchases. This is another way that paying by credit card can give you peace of mind and protect you if anything goes wrong. Here are a few examples of how this can help you:

• Making an expensive purchase? Use a card with purchase protection that covers new purchases against damage or theft, normally for the first 90 days.
• Buying electronics or appliances? Pay with a card that offers extended warranty protection. This typically adds an extra year on eligible warranties.
• Renting a car? Decline the rental company's insurance and use a card that offers rental car damage and theft insurance instead.
• Going on a trip? Make sure to pay for expenses with a card that offers travel protections, such as trip delay reimbursement, trip cancellation/interruption insurance, and lost/delayed baggage coverage.

Protections, as well as how they work and coverage maximums, depend on the credit card. There are some cards that offer all the protections listed above. Even many no annual fee credit cards offer at least some complimentary protections. You can find information about this on the card's webpage and its guide to benefits.

Credit cards sometimes get a bad rap, but don't let that discourage you from using them. When used correctly, they can benefit you financially from the rewards they offer and protect you as well. The key is to always follow the golden rule of paying the bill in full by the due date.