Credit Cards Don’t Have To Be The Enemy

How many times have you read that you should cut up your credit cards and use cash to pay for everything? For anyone who really can’t control their spending, this is probably good advice, but for the majority of people, it makes a credit card out to be more than it is. Properly used, a credit card isn’t the enemy… it’s just a tool, like cash or your checkbook… and the right credit card can actually earn you money.

We pay for everything with a single credit card. The credit card we use has no fees and gives us points back for every dollar charged. When enough points have accumulated, we redeem them for cash. And no, using the credit card does not encourage us to spend more than we would if we were paying cash for everything, and we do not carry over a debt from month to month. We use the credit card the same way we would use cash. The only difference is that periodically the credit card company sends us a check for $250 when we redeem our bonus points… and by anybody’s standards, that $250 is money we would not be getting if we had used only cash. Don’t let anybody tell you that the only perks credit card companies offer are cheap merchandise and useless discounts. If you have good credit and you shop around, you should be able to find a credit card that will give you back actual cash and will not charge you anything for the privilege!

We use the credit card to pay for groceries, the electric and telephone bills, whenever we buy gasoline and heating fuel, major items like appliances and our business expenses. These are fixed expenses we have to pay month after month, and they add up to the same amount if we pay for them in cash or with the credit card. It makes a huge amount of sense for us to use the credit card and take advantage of the cashback bonus.

Obviously the use of a credit card does require some personal discipline. No one can just go out and charge, and charge, and charge… without eventually having to face the consequences. But used judiciously and with common sense, a credit card can be a useful financial tool making money for you that you would never have otherwise. We keep a running total of every bill we pay when we pay it with the credit card, and every item we purchase at the time we purchase it with the credit card, the same way we would do if we were paying by check. That way at the end of the month when the credit card bill arrives, the amount due is never a surprise. And because we always pay the full amount due every month, we never have to pay any interest fees. That makes our use of the credit card absolutely free… and it’s always busy earning money for us, too. You can’t beat that!

Filed Under Simple Living, Voluntary Simplicity, Frugality