Credit cards can be powerful tools when used responsibly. In this interview, Bankrate expert Ted Rossman breaks down when it makes sense to use credit cards for everyday purchases, why paying your balance in full matters, and the often-overlooked perks that go beyond rewards — from purchase protection and extended warranties to travel insurance, cell phone coverage, and roadside assistance. Ted also explains why credit cards generally offer stronger fraud protection and easier dispute resolution than debit cards, how virtual card numbers work, and why turning on transaction alerts and reviewing statements regularly can save you time and money. Whether you’re trying to build credit, maximize perks, or stay safe from scams, this video shows how to use credit cards like a pro — without falling into debt.
Jeffrey Snyder, Broadcast Retirement Network
Well, joining me now is Ted Rossman of Bankrate. Ted, always great to see you.
Thanks for coming back to the program this morning.
Ted Rossman, Bankrate
Great to be here, thank you.
Jeffrey Snyder, Broadcast Retirement Network
I’m very excited when I don’t chase off guests, so we’re glad to have you as a regular guest. You guys do a lot of important work at Bankrate. Ted, I wanted to ask you about credit cards.
We’ve covered it in a lot of different angles, but credit card debt has really ballooned. A lot of Americans are making credit card, using credit cards for their personal and critical expenses. But I guess the question I wanna raise with you is does it make sense for an individual to, given all that, to make all their purchases using a credit card or credit cards?
Ted Rossman, Bankrate
I’m a huge fan of using credit cards if you can check a few boxes. Obviously, the big one is whether or not you pay in full every month. Because as you noted, credit cards have very high interest rates.
The average is close to 20%. But the good news is that just over half of credit card holders are avoiding those high interest rates by paying in full every month. I wish that number was even higher.
I wish everybody would pay their credit cards in full. Now, that may be easier said than done. If you have credit card debt, forget about rewards for now.
Forget about some of these other benefits we’re gonna talk about. You really wanna knock out the debt first. You get the balance transfer card, you work with the nonprofit credit counselor, knock out the debt.
But if you’re among those 53% or so who are paying in full every month, well, then there’s a lot to like. And we know a lot about airline miles, hotel points, cash back. That gets a lot of the headlines, but there are actually a lot of hidden, less heralded credit card perks that can be really valuable as well.
Jeffrey Snyder, Broadcast Retirement Network
Before we get into those perks, I wanna ask you, my thesis is that Americans wanna save. They wanna save for retirement, they wanna save, but because of their income, where they are in their lives, the affordability, they just have some challenges. I mean, is that aligned with, I’ve never met someone on the street here in Charlotte or in New York or wherever else I’ve lived that said, I don’t wanna save money.
Ted Rossman, Bankrate
It’s a good point. And we don’t wanna shame people, right? Often there is a lot of shame associated with credit card debt.
And we need to take that out of it because our research shows that the most common thing that gets people into credit card debt is an emergency expense. It’s a medical bill, it’s a car repair, it’s a home repair, something like that. The second most common explanation is just day-to-day expenses outpacing your paycheck.
And we’re talking about necessities, gas, groceries, other things like that. When we asked about other things like vacations and shopping sprees, that fell way down the list. It tends to be something practical that got you into credit card debt.
And savings and debt are really two sides of the same coin. Right now, the personal saving rate is very depressed and a lot of that has to do with just a high cost of living. So I empathize with that.
I would say though, that you can still get ahead using credit cards. Like if you’re using the debit card at the grocery store, you have the money, right? It’s coming out of your account.
And to some extent, I applaud the staying out of debt, but what if you used a credit card like a debit card and you paid it off right away, but you got the 6% back on groceries and you got some of these other benefits that we’re going to talk about? Responsible credit card usage can be really impactful. You build credit, you get rewards, you get other benefits.
It’s that industry saying about power tools, right? Credit cards are like power tools. They’re either really useful or dangerous.
It’s all about how you use them.
Jeffrey Snyder, Broadcast Retirement Network
So let’s talk about the perks. I think most people are aware, I should say, of the rewards like mileage. You talked about 6%, 3%, 4% back.
Those are really good rewards that can help offset future travel or even future purchases. But what are some of the maybe lesser known benefits of using a credit card?
Ted Rossman, Bankrate
There are a lot of good ones beyond rewards. Purchase protection is one that I can attest to personally. So purchase protection is basically if something breaks, it gets lost, it gets stolen within some time of buying it.
It’s often something like 90 days or 120 days. Case in point, my wife bought an Apple Watch once and then let’s say a month after buying it, she’s walking along, her arm hits something, screen cracks. Oh no, we’re going to lose hundreds of dollars on this watch or have to repair it.
The credit card company actually paid for a replacement because we were within that 90 day window. That sort of damage was covered. So that can be huge.
Some credit cards give cell phone insurance and they’ll reimburse you for different repairs or theft or something like that. So many other things, extended warranties. If the manufacturer gives you a two year warranty on that TV or refrigerator or washing machine, a lot of times your credit card’s going to tack on another year for free just by using that card.
All these perks involve using that card for that purchase. Travel insurance is another really good one. Everything from rental car insurance to trip cancellation or interruption protection, lost or delayed luggage.
There are so many extras. Roadside assistance, a lot of credit cards will cover that. It may not always be free, but it could be a low flat rate and they also deal with a lot of the hassle.
So you’re on a road trip, you’re in an unfamiliar area, you can actually a lot of the time call Visa or MasterCard and they’ll send someone to jump your car or top off your gas tank or change a flat tire or something like that.
Jeffrey Snyder, Broadcast Retirement Network
So I like that you mentioned the cell phone coverage because as my wife will attest to, I drop my phone. I have like butterfingers, so I drop my phone all the time. I do have a protection on here in terms of the screen, but I could really use that.
So Ted, how do I find out what benefits are available to me? Do I log on to the site? I’m assuming it’s baked somewhere in that big thick document that gets sent with the credit card or now they’re probably sent online to reduce overall costs.
But where do I find these benefits so I know what I get and what I don’t get?
Ted Rossman, Bankrate
It’s a good question because part of why these are unheralded benefits is because people don’t know about them, they don’t understand them, it’s confusing. A couple of things to watch for. Some of these are doled out at the network level.
So that would be Visa, MasterCard, especially if you have some of the more premium cards. It doesn’t need to be super high-end, although those usually have even more perks, but look in your wallet. Do you have a Visa Signature Card?
Do you have a Visa Infinite Card, World MasterCard, World Elite MasterCard? These are sort of mid-tier and above credit cards that often have additional perks. Others are doled out more at the card issuer level.
So that’s the bank that’s extending you credit. That’s Chase, Capital One, Citibank, someone like that. A lot of times you qualify for two different flavors of benefits.
Like maybe your Chase Visa may have some Chase benefits and some Visa benefits. So there’s actually a lot of good stuff to look into. We have articles at sites like ours at Bankrate or our sister site, The Points Guy.
You could call up customer service. You could just call the number on the back of your card and say, hey, what extras do you offer? What am I covered for on this card?
Guide to benefits is sometimes kind of the industry term. Maybe you can ask them to send you a guide to benefits or maybe they can direct you to the web version. Maybe you got one long ago when you opened the card.
But if you’ve kind of lost track of that, these are some of the questions to ask, whether it’s a web search or some industry reading or just contacting customer service, figuring out sort of what benefits you get. I would venture to guess that the list is a lot longer than most people realize.
Jeffrey Snyder, Broadcast Retirement Network
I bet, and it sounds like, and it probably grows over time as partnerships develop and evolve. Ted, I wanna shift a little bit. Let’s talk about, as you know, and we’ve talked about this, I think you and I, and I’ve talked about it with others, cyber fraud.
Let’s talk about fraud and fraud protection and scam protection. I can’t tell you, Ted, how many emails, texts, phone calls I get that are flagged as potential scammers. So I know what’s out there.
If they’re targeting me, they’re targeting a lot of people. These, there are ways to protect yourself using your credit card. There’s probably another reason why if you purchase something, especially a larger item on a credit card, you can protect yourself if some scammer gets your card, starts to charge things that maybe you didn’t know about.
Ted Rossman, Bankrate
Absolutely. This is another benefit of using credit cards. So, you know, we’ve talked about rewards.
We talked about building credit. We talked about some of these ancillary benefits you don’t know about. Fraud protection is another really important category because even though most debit cards have some level of fraud protection, it’s not as good as credit cards.
Credit cards are really the gold standard when it comes to fraud prevention in a few respects. One of them is that it’s the bank’s money up until you pay them back. It’s a loan.
It’s a line of credit. It’s not actual money coming out of your checking account. With a debit card, any money that’s stolen is coming directly out of your bank account.
And even though you should get it back if you report it promptly, the window for reporting debit card fraud is a bit shorter than credit cards. It’s usually more like 60 days instead of 120. But even if you get that money back, it’s getting the horse back in the barn.
It’s getting the toothpaste back in the tube. I mean, pick your metaphor. It’s actual money missing from that debit card and that checking account.
The credit card, you’re not actually liable for any real money because it’s a line of credit. That can easily be wiped off your bill if it was fraud. So that’s a major benefit.
Some credit cards actually let you use what’s called virtual card numbers, where you can sort of mask your true card number. You get a temporary disposable one from customer service. That can be another proactive way to kind of isolate some fraud.
Credit card disputes are a powerful tool. If you have something go wrong, like the merchandise didn’t arrive or it was damaged or something didn’t go according to plan, it’s usually a lot easier to get the credit card company to wipe it off your bill and fight on your behalf, as opposed to with the debit card, you’re just trying to recreate the wheel and get the money back and that’s harder.
Jeffrey Snyder, Broadcast Retirement Network
Let me ask you as a follow up to that. I completely agree. I mean, I can’t tell you many times that I’ve, I was driving one time through the Holland Tunnel.
I dropped my wife off at work, driving through the Holland Tunnel back to Jersey City, and I get a text that someone withdrew money from an ATM from my account. I was panicked. I made the phone call.
I was able to resolve it through my bank and we were able to take care of that. Maybe a little bit different from credit card fraud, but still fraud nonetheless. Should you, to that point, should you turn on the notifications when a charge is made?
I do it because I like to keep track. I’m anal retentive. I like to keep track of my spending in a spreadsheet, but is that a good rule of thumb?
Every charge I make, whether it’s a automatic deduction or a charge that I make or someone makes, is that good to turn that on?
Ted Rossman, Bankrate
That can be a smart proactive step. And certain issuers let you set different thresholds. Like maybe you want to be notified if it’s above $100 or above $500, but maybe you don’t care about lower amounts or maybe you really want to see everything.
I mean, sometimes fraudsters actually start with small charges. And then if those go unnoticed, then they move on to something bigger. All of this is a good justification for looking through your bank and credit card statements every month.
Can also be a good financial management tool just to see where your money is going. But specific to fraud, yeah, you definitely want to keep a close eye on this sort of thing. Text alerts are a great way to do that or just getting in the habit of logging into the app regularly.
Even if you do this every day or every few days, you just do a quick scan, like that all looks legit. Or if there’s a problem, it’s better to know sooner rather than later. I do like getting those text alerts though, because we are seeing a lot of fraud these days.
It’s this sort of wild west online where that’s where the fraud has gone. These chip enabled cards are really good at deterring in-person fraud. And we’re not seeing nearly as much in-person fraud as we did back with the old magnetic stripe cards that were easier to steal.
But now online is where a lot of the fraud’s happening and that’s where a lot of people are transacting. You don’t want it to be out of sight, out of mind.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, and it’s all bad actors in places that we have no, you know, it’s state sponsored, it’s places where we have no reach as a country to extradite people. That’s a whole nother issue. Ted, we’re gonna have to leave it there.
Great conversation. I love that we’re able to go back and forth and talk about so many different things. You’re so well-rounded.
Thanks for joining us. And we look forward to having you back on the program again very soon, sir.
Ted Rossman, Bankrate
My pleasure. I enjoyed it. Thank you.