Why do people really use credit cards? Do credit cards give us anything we can’t already get elsewhere? With the possibility of credit card debt, are they even worth it? The next time you whip out the plastic to make a purchase, ask yourself “what does this credit card really do for me?”

Here are some of the things your credit card might offer you:

1. Credit cards offer convenience.

One of the biggest benefits of using a credit card is your ability to pull it out to make a purchase without first having to stop at an ATM to get cash. They can also be used for online or phone purchases and bill payments, meaning you don’t have to write and send a cheque. Then again, debit cards can do the same thing, so do you really need to use credit cards?

2. Credit cards offer perks.

Many credit cards, like the Citibank Clear Platinum credit card, offer cardholder perks like complimentary international travel insurance. But so do some debit cards, like the NAB Gold Banking with Visa debit card. Again, are credit cards really necessary?

3. Credit cards offer rewards.

Okay. Here’s where some credit cards have debit cards and other financing options beat. If you choose a rewards card you’ll be able to earn rewards points towards things like shopping vouchers or cash back. Actually, some debit cards do offer these perks, just usually at a lower level. What you probably won’t ever find as a debit card reward though is a chance to earn frequent flyer points like you do with the American Express Blue Sky card.

4. Credit cards offer special shopping deals.

Some credit cards offer you discounts (or extra cash back or more rewards points) when you shop with certain companies. That essentially means you’re getting a bigger discount by using a credit card than a debit card or cash. The Citibank BP credit card is an example of this, allowing you to save 5% on your BP petrol purchases.

5. Credit cards offer more spending power.

Another big benefit of credit cards is that you can use them to finance larger purchases you might not be able to afford by paying in full up front. They give you the ability to spend more than you have now, by essentially borrowing against future disposable income. That’s certainly a nice perk over cash, but you could get the same benefit (sometimes at a lower interest rate) by taking out a personal loan.

In the end, no single benefit of credit cards really makes them “must-have” financial tools. Instead it’s the combination of benefits that makes them useful. They combine the financing power of loans with the convenience of debit cards, and some even tack on extra perks and rewards for good measure. Take a good look at your credit cards. Are they doing enough for you? If not, it might be time to switch to a card that works harder for you with very dollar you spend.

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