Hello Sophisticated Spenders!
My credit card strategy is pretty simple:
Use Your Credit For Good!
I cringe when I hear people say, “I’m doing good with my money because I don’t have any credit cards.”
I also cringe when I’m out with friends and I see them pull out their bank or atm cards to pay for items and outings.
It’s OK to use credit cards!
Here are the reasons I whip out my credit card to pay for items 100% of the time:
1. Rewards points! Last year I racked up over $400 in rewards points just because I use my credit card for everything. Please note: You must pay off your credit card in full each month to receive the full benefit of this option. Or make sure what you are paying in interest is less than the amount of said reward.
2. Anti-Fraud! If you accidentally leave your bank card at a bar or drop it somewhere by mistake, your money is tied up if someone picks that sucker up and starts using it. Yes you will eventually get your money back. But why leave that option open. None of your cash is compromised when you lose a credit card.
3. Budgeting tool! I have a maximum amount of money that I am allowed to spend on my credit card per month. It is easy for me to log in every day and see how much “money” that I have spent and adjust my spending accordingly. I don’t feel guilty about spending my money when I know my spending limit! I have lots of fun spending the money that I have budgeted to spend.
4. Money tracking tool! I know exactly where EVERY penny of my hard earned dough goes. This also makes my life easy at tax time. I’m able to track how much money I spend on gas, groceries and (my favorite) happy hour.
5. Extra insurance and protection! By swiping with certain credit cards you receive purchase protection. I bought tickets for an event that got cancelled (and was never informed it was cancelled). I contacted my credit card and they immediately refunded the money. I’m able to decline car rental insurance when I rent said car with my credit card. There is also a sale price guarantee feature that is super complicated but I’m pretty sure there is someone out there who actually takes advantage.
**note** I actually HATE using cash because I received said $400 reward in cash and I have NO idea where it all went. I slowly and eventually spent it (well to this day a $100 bill is still not accounted for, and yes that hurts!). So I try to avoid cash whenever possible.
What is YOUR credit card strategy?
2 thoughts on “5 Ways To Use Your Credit For Good”
I actually love using cash, however, with big ticket items I now use credit cards to get mileage. As you noted-you have to pay it off! So now what I do is: save the cash, purchase the item on whichever mileage card I’m focused on, then pay it off. I think that you have a high level of discipline that a lot of people don’t. Credit card strategies have to be very carefully utilized, if people are trying to relearn their financial habits, credit cards might be something they try to avoid.
I hear ya on that Michelle! I had to stop myself one time because I was “chasing” rewards points and lost focus of my budgeting. I set an upper number for my credit card. And when I go over that number, I’m supposed to go cash only. Or I use cash only throughout the month so that I reach my max withn a reasonable amount of time!