Cash is king, except when it’s not. There are times when paying by credit card is best for a variety of reasons.
Here’s when it’s ideal to whip out the plastic.
The purchase is tax deductible
Paying in cash and not receiving a receipt could prevent you from taking advantage of deductions for things like charitable contributions, medical and business expenses and childcare costs, points out Bill Artzerounian, director of tax planning at Grove Street Fiduciary in Peterborough, New Hampshire.
“While it is easier to split that lunch or coffee meetup with the cash in your pocket – it now becomes that much harder to track and deduct,” says Chris Kampitsis, a certified financial planner ar Barnum Financial Group in Elmsford, New York.
“Never buy plane tickets on your debit card or in cash. You’ll benefit more from using your credit card. You accumulate air miles and loyalty points, and get a travel insurance policy,” says Igor Mitic, co-founder of the financial website Fortunly.com.
Some credit cards qualify for discounts at hotels and car rentals when you use them to buy plane tickets. If your flight gets delayed or canceled, your credit card may provide you with additional coverage and benefits.
Similar to airplane tickets, booking hotels with a credit card can give you bonuses and protection in the event you have any issues, like an overcharge.
Pay recurring monthly bills on a rewards credit card. “You have to pay the bills, why not get something in return?” says James Comblo, a certified financial fiduciary with FSC Wealth Advisors in Wappingers Falls, New York. And pay the bill in full every month.