Are you taking advantage of your credit cards?

Some people worry about the security and spending risks associated with using credit cards, but the perks of disciplined card use are plenty.

EverQuote spoke with John Ulzheimer, Credit Expert at, to learn how to get rewards, to raise your credit score, and to simplify budgeting with your credit card.

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Confront Your Credit Card Fears

Before digging into the benefits, a quick backtrack to common credit card fears: decreased security and increased expenses.

Ulzheimer says these worries are misconceptions. “The Fair Credit Billing Act caps your liability for credit card fraud to no more than $50, and the 4 major credit card networks (Amex, Visa, Discover, MasterCard) have zero fraud liability policies.” In other words, credit card owners would be reimbursed for any fraudulent activity.

As for increased expenses, “credit card use only has a cost if the cardholder chooses a card that has an annual fee and/or they choose to carry a balance from one month to the next and incur interest fees,” Ulzheimer explains. Choose a card with no annual fee and pay your bills on time, and your credit card won’t cost anything.

Get Rewarded for Spending Money

Certainly you’d like to get paid for spending money.

plane flying over clouds blue skyCredit card rewards aren’t quite that simple, but navigating your credit card use correctly can yield some sweet returns. Ulzheimer explains that the most popular rewards come in the form of airline miles, cash back, and point-accruing cards.

  • For the traveler, “Airline mile rewards can be used to purchase airline tickets or upgrade from a coach to a first class seat,” Ulzheimer says. Hello, reclining seats.
  • Cash lovers can redeem cash back rewards in the form of a check or gift cards to certain stores.
  • If you’re into multiplying your reward, “points cards allow the user to accrue points normally at the rate of one to two points per dollar spent on the card.” Then, users can redeem their points for cash or gift cards.
  • Other, less popular reward categories, like gas rebate cards and retirement savings, allow you to get specific with where your rewards go.

Each card has a different rewards system. Find one that aligns with your interests and needs.

Build Your Credit Score with Plastic

Plastic might not suffice in construction, but it certainly helps you build up your credit score.

Ulzheimer confirms that “just having a credit card in good standing is good for your credit score.” Using your card responsibly further the positive impact. Stick to these credit card guidelines for best results:

  • Keep a low balance relative to the card’s credit limit. “Shoot to keep your balance to no more than 10% of the card’s credit limit,” Ulzheimer advises.
  • Pay all of your bills on time. Not only will you avoid hefty interest fees, you’ll also ensure that your credit card is helping—rather than hindering—your credit score.
  • Avoid opening and closing credit card accounts frequently.

The perks of a good credit score breed new perks. A higher credit score can lead to savings and advantages down the road, including lower interest rates on loans and larger purchases and better car insurance rates.

Budget Better With Your Credit Card

If you’ve been keeping up with the EverQuote posts about money management and saving money, you know that budgeting is key to financial health.

Some people swear by the envelope budgeting method. But the advantage and convenience of carrying a credit card paired with the close documentation of all of your purchases can make budgeting work for those who aren’t committed to cash.

Since all of your purchases will be recorded on your bill, a credit card offers increased insight into where your money is going. Online account management makes it easy to download your transactions into a document that you can manipulate for your budgeting needs.

Ulzheimer points out the additional budgeting help that comes with a card: “Many credit card issuers also offer simplified statements, spending alerts, and payment reminder alerts.” Automation helps you stick with your budget.

Look to Your Card for Unlikely Insurance

Ulzheimer notes that the terms of use of your credit card agreement outline all of your card’s benefits, which often includes unexpected insurance coverage.  “Unfortunately most people don't read their credit card agreement so they're not familiar with all of their card's perks and therefore cannot fully leverage its benefits.”

credit card benefits in terms of agreementDepending on your card, you may be covered for the following:

  • Travel accident insurance and baggage protection
  • Car rental insurance
  • Warranty extensions
  • Trip cancellation insurance
  • Roadside assistance

Read the fine print so that you know when and where to use your card. The coverage will only apply if you used that company’s card when you bought the item or service (for example, when buying a flight). Credit card companies offer these benefits as an incentive to use their card over another company's.

Ulzheimer concludes that “credit cards offer what other methods of payment cannot...portable capacity in a low cost (or no cost) and fully secure form, that also help you to establish and maintain solid credit reports and credit scores.”

If you’re prone to overspending, or if you’ve let a tempting credit line drag you into a sea of debt, sticking with cash and debit might be best. But if you can spend responsibly, use the plastic and take advantage of its perks.