You are welcome, aferwardsness.
In addition to what Anshul said, Use Preview Bounds has a wide range of effects, sometimes rather troublesome; in many/most cases it is either needed or troublesome.
To mention some of the effects, in connexion with stroked paths, Use Preview Bounds adds the outer half of the Stroke Weight to the size of the object, which can be seen in the Transform palette, such as a nice regular rectangle such as 200 x 100 pt which will become 201 x 101 pt; for a similar rectangle of 200 x 100 mm will become an even less nice number. Effects such as Gaussian Blur and Drop Shadow will add the extension of the effect, for the latter even moving the centre of the object in the Transform palette. When distributing objects to be abutted by side, the outer bounds of the strokes will be abutted rather than having the strokes overlapping. All of these can be against the desired workflow.
All that said, it is important to be aware of the outer bounds when you create raster images, especially when you have strokes/effects, and ensure nothing is missing, either by having Use Preview Bounds on or by adding to the size.
Edit: And what Ton said while I was delayed in answering.
Edit edit: Actually, Ton made me aware of the serious ommission I made in the text in my answer above.
Step 1) should have been:
1) With the normal (Point) Type Tool create the text as live Type (you may wish to choose Align Center in the Window>Paragraph palette bundled with the Character palette where you set the font and size), then use the Effect>Path>Outline Object;
This is necessary for the instructions to work, and this is what I actually did in the second line of the image.
And this is exactly what Ton suggested.
The "Tick Use Preview Bounds in the Genereal Preferences" in step 0) and the follow up in 5) only apply "If you wish to align the background rectangle by the visible bounds of the characters rather than the Em box,"
Without step 0) and step 5), the rectangle will be aligned by the centre of the Em box instead of by the visual bounds, and the difference can be important.
I will correct step 1) in the answer above, with a note pointing to this.
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