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Cash Vs. Credit: When Does Plastic Trump Money?

Photo Credit: Thinkstock

Photo Credit: Thinkstock

Dorothy Tucker Dorothy Tucker
Dorothy Tucker has served as a reporter for CBS 2 Chicago since 1984....
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CHICAGO (CBS) — Cash is king, but not necessarily for everything.

There are some times when you should definitely pull out the plastic.

CBS 2’s Dorothy Tucker tells us when credit trumps cash.

Jane Risteen is buying a $700 appliance, on credit.

Convenience is one advantage, but not the only one.

The biggest advantage, according to experts, is that credit cards come with lots of perks and protection that cash can’t offer.

For example, charge electronics or appliances and you automatically receive a best extended auto warranty.

“It’s also a good thing for TVs where you’re worried about the sort of defect that would fall under a manufacturer’s warranty,” Kelli Grant of Smart Money Magazine says.

Use a credit card to pay for your airline ticket or other travel arrangements, and some will provide secondary travel insurance in case you have an accident while on your trip.

“We’ve also seen a handful of cards that will reimburse you if you lose your bag,” Grant says.

Some cards will also reimburse you if the price drops on an item you’ve already purchased.

A gym membership and other monthly bills are also on Grant’s list because with credit you can dispute any erroneous charges.

You get the same protection when you charge hotel stays.

Chris Williams charges all of his big ticket items just for the rewards.

“I don’t do it for any other reason but to get points, discounts on gas, discounts on airline tickets,” Williams says.

Rack up the rewards, but pay off the credit card balance at the end of the month so you won’t rack up the interest charges. If you don’t, the interest on the card will outweigh the perks.