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Recently, a friend and I both went through separate situations where we became victims of scams and theft. We lost a combined total of almost $4,000. Neither situation had a happy ending. Still, we each learned a lesson that's important to share. Credit cards could have solved our problems in either circumstance.

As a credit expert by trade, I'll be the first to warn that credit card debt is bad for you, but I'm also quick to point out that credit cards themselves aren't the problem. When you pay your bill on time each month, they provide benefits you miss out on with other forms of payment. Perhaps the biggest credit cards is something many people overlook. When you make purchases with a credit card, it can protect you and you money from people with bad intentions.

The Baseball Team That Never Was

A few years ago, my husband and I signed our son up for a travel baseball team. The fees for the season totaled $950. The organization required payment up front, and they didn't accept credit cards. As people who pay for almost everything with a credit card (give us all the rewards!), the requirement made us pause. But, against our better judgment, we paid the sport's fee via check.

Practices for the baseball team began as scheduled, but we soon learned there weren't enough players to form a full team. We were told more players would join soon, but a few weeks passed and the numbers didn't grow. Shortly thereafter, the organization closed, and all future practices and games were canceled. We were promised a refund, but when we followed up, we only received excuses. Soon the "call me back tomorrow" responses turned into no answer at all. It was clear we weren't getting our money back.

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The Case of the Stolen Cash

Around the same time as the baseball debacle, my friend (who we'll call Nancy for the sake of privacy) had an unfortunate situation that cost her $3,000. Nancy saved for a year and took her family on a Walt Disney World vacation using an all-cash budget. On the first day of their trip, someone stole Nancy's wallet—and her entire $3,000 vacation fund.

Nancy reported the theft, but there was no way to get back the missing cash. She requested a new debit card from her bank and it was overnighted to her home address. A friend then overnighted the card to her at her vacation destination. The family followed a strict budget and windrew $1,500 for food and travel expenses from their savings rather than cancel their trip. The $3,000 in stolen cash was never recovered.

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Chase Sapphire Preferred®

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Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Travel℠. Dollar Equivalent: $1,380 (60,000 Chase Ultimate Rewards Points * 0.023 base)

Southwest Rapid Rewards® Plus Credit Card

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Earn 2X points on Southwest® purchases. Earn 2X points on Rapid Rewards® hotel and car rental partners. Earn 2X points on local transit and commuting, including rideshare. Earn 2X points on internet, cable, and phone services; select streaming. Earn 1X points on all other purchases.

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Earn 50,000 bonus points after spending $1,000 on purchases in the first 3 months from account opening. Dollar Equivalent: $700 (50,000 Southwest Rapid Rewards Points * 0.014 base)

Wells Fargo Active Cash® Card

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Earn unlimited 2% cash rewards on purchases.

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Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.

Citi Custom Cash® Card

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Earn 5% cash back on purchases in your top eligible spend category each billing cycle, up to the first $500 spent, 1% cash back thereafter. Also, earn unlimited 1% cash back on all other purchases. Special Travel Offer: Earn an additional 4% cash back on hotels, car rentals, and attractions booked on Citi Travel℠ portal through 6/30/2025.

$0 $200Cash Bonus More Info

Earn $200 in cash back after you spend $1500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® points, which can be redeemed for $200 cash back.

Advantages of Credit Cards

Both scenarios could have been less horrible if Nancy or I had used a credit card. In my case, there was no easy way, outside of a courtroom, to try to recuperate our losses when services weren't delivered as promised. Because we paid with a check, we couldn't dispute the charge with our bank.

Had I been able to pay with a credit card, I would have disputed the charge under the Fair Credit Billing Act (FCBA). Per the FCBA, if you use a credit card you have 60 days to dispute a transaction when a merchant fails to perform the services it promised. If my credit card company's investigation had ended in my favor, I would have gotten the $950 back. In Nancy's situation, she could have called her card issuer, reported the card as stolen and requested a replacement. The FCBA would have protected her from liability for any unauthorized charges.

In addition to fraud protections, the best credit cards offer both travel and purchasing benefits:

  • Purchase protection: This covers eligible purchases in the event of theft, accidental damage and sometimes loss. It's usually limited to the first few months after you make a covered purchase with your card.
  • Travel protection: When you use a credit card to pay for travel expenses, travel protection benefits could kick in if your trip doesn't go as planned. From travel delay reimbursement to trip cancellation coverage, the right travel credit card could protect you in a big way.
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Bottom Line

It's understandable to be worried about racking up debt or paying expensive interest fees with a credit card. But as long as you pay on time and in full every month, you can take advantage of credit card benefits without wasting money on interest fees.

Credit cards are the clear winner when it comes to protecting your hard-earned money. Cash, checks and even debit cards simply don't offer you the same robust protections that credit cards do.


Michelle Lambright Black

Michelle Black is founder of and Michelle is a leading credit card journalist with over a decade and a half of experience in the financial industry. She’s an expert on credit reporting, credit scoring, identity theft, budgeting, small business, and debt eradication. Michelle is also a certified credit expert witness and personal finance writer.