How to use credit cards wisely

Fire can be one of the most destructive forces on earth, and yet some say civilization began when we figured out how to harness its power. Credit cards are the same. Ask any long-time reader of Get Rich Slowly if credit cards are good for anything, and you might get a response like: “They're to be ripped up and burned in an atmosphere-polluting bonfire of relief!”

There was good reason to hold that opinion back then. In the days leading up to the Great Recession, a lot of consumers were getting burned by the trap of easy credit and conspicuous consumption. Frankly, the weight of his own credit card debt is what spurred J.D. Roth to start Get Rich Slowly in 2006.

It's easy to visualize the situation from the chart below. Credit card debt was becoming the largest category of non-mortgage debt in America at that time.

Changing the Credit Card Dialogue

But there's also good reason to change that opinion about credit cards. Even J.D. Roth's perspective about credit cards evolved over time — because he decided to stop what he was doing and learn to take control of his finances. Instead of playing with fire, he learned to harness it.

It's actually an important milestone to reach, being able to use all the tools available to you responsibly and not get burned. In fact, I'd go so far as to say that being able to handle credit properly is evidence of the kind of fiscal restraint and financial maturity that's necessary to reach financial independence.

Money vs. Credit

Accepting that a credit card is a tool and not a trap is a good step. But it's just one step among many. To really understand how to handle credit responsibly, we first need to step back and remember the lessons discussed in Money matters: How money works.

As I mentioned in that post, money is a means to facilitate exchanges and store wealth. Banking as we know it developed as a way to put that stored money to use for its owners, and credit (or debt) was born. As you saw with the history of banking, credit and money are closely related but they are not the same … and neither are the financial tools we use.

Debit vs. Credit

The key, then, to handling credit responsibly is to understand what it is. A credit card is primarily a debt instrument, not a payment instrument (even though many use it only for payments). Credit cards come with a revolving line of credit for you to use or not to use. In other words, credit cards combine money exchange and credit.

A debit card, on the other hand, is purely a payment instrument. Debit cards are all about money exchange; and for many, they're popular financial tools because they provide money exchange in a way that eliminates the temptation of getting into debt.

Both financial tools can be used as payment instruments, but they are not the same. Recognizing that one is a debt instrument that can be used as a payment instrument and the other is purely a payment instrument is one way to help you use them properly.

Is it Good to Have Debt?

We can line up two crowds of people right now, one for each side of the argument. In both crowds, you will find people successful in their money matters and people who are not successful. It is not just people with debt who mess up their money.

But messed up debt is a lot more painful than other forms of financial mismanagement. And the ease with which you can get into debt trouble with credit cards is what alarms most critics.

It is a valid criticism based on the facts. Most GRS readers are aware of the dangers of debt and have arranged their lives in a way which minimizes those dangers. Many, it would seem, have taken the tack that not having a credit card at all is the best way to stay out of debt.

Man with head in the sand

Such a strategy, though, overlooks the payment and security benefits credit cards have — not to mention that learning to handle credit wisely can teach valuable lessons on your way to financial independence.

The simple fact is that you don't have to get into debt if you own a credit card, but to handle credit appropriately you need to exercise fiscal restraint. It's a natural part of financial growth, which comes with certain benefits if you learn how to manage your finances well.

Benefits of Using Credit Cards

It's good to know that, if you're ready to take a different perspective about credit, there are some benefits to credit cards that debit cards do not offer.

  • Credit history: Again, because a credit card is regarded as a credit instrument, you build a credit history even if you pay off the entire bill every month. Using a debit card offers no credit-rating advantage. Chances are you will buy a house and car on credit, which makes a good credit rating imperative in this day and age.
  • Cash freeze: When you make a booking with a debit card, they place a hold on your account, which effectively freezes that amount. Other online vendors might do the same thing. Because credit is so interwoven in a credit card, however, that amount is considered a free loan to you, because the actual amount is not applied to your account until you check out of your hotel or the stuff you buy online is shipped.
  • Protection: When you buy something with a debit card, that money is taken out of your account immediately. If you get home and discover a defect, you are dependent on the vendor's goodwill to get your money back. With a credit card, you have a fallback position. If you are unable to resolve the dispute, you can get the credit card company to refuse payment to the vendor and you are never charged.
  • Fraud protection: Likewise, when your card is stolen and used for fraudulent charges, you lose your money at first with a debit card. Although you usually get it back, you are out that money until you do. With a credit card, it is a lot simpler — they simply mail you a new card and you are back in business, and never liable for those charges. The end result may be the same, but the path isn't as painful for credit card users.
  • Car Rental: A friend of mine wanted to rent a car for a trip to Canada. He didn't have a credit card, and he was turned down by several car rental agencies if he wanted to use a debit card. The only way they would waive that exception was if he had a round-trip airline ticket and he was from another place.
  • Rewards: Affinity credit cards (such as those for airlines, your alma mater and hotel chains) offer rewards not available to debit card holders. Although a few debit card issuers offer points or rewards, they are not nearly as common as for credit cards, even those that aren't part of an affinity program. For example, Holly Johnson has a number of articles here on GRS about vacations they funded with credit card reward points.

Downsides of Using Credit Cards

When comparing the two plastic options as an alternative means of payment, credit cards for the most part work better than debit cards too. But there are a couple instances where that is not the case:

1. Vendor limitations: Some retailers, notably Costco, do not accept credit cards, only debit cards. In general, there are more establishments taking debit and not credit than the opposite. Therefore, a debit card opens more doors for you than would a credit card.

2. Payment problems: Because a credit card is always a debt instrument, there is a bill, usually once a month. If you are involved in an accident or find yourself in an unplanned absence and you miss a payment, you incur fees and other kinds of hassles (possibly including a taint on that credit record you want to burnish). With a debit card, everything is always paid.

J.D. Roth's Essential Credit Card Behaviors


  • I resolved to make my decision to buy first, and then decide how to pay.
  • I vowed never to buy anything unless I had cash in the bank for it.
  • I promised to pay my card in full every month.
  • I told myself that I'd never use my card for an impulse purchase.

[Read How to use a credit card (without going into debt) for the full story and J.D.'s essential credit card skills.]

Doing What's Best For You

Sticking with the notion that credit cards are evil might be necessary for you at the moment, but it can be a mistake to hold on to that notion forever. There are distinct advantages to using credit wisely (not to mention that, as your credit history improves, some of your expenses could also go down as a result).

Being able to handle credit responsibly is one way to know you are mastering your finances. It's like learning to start a fire and not let it burn you or get out of control. For someone that is committed to that growth process, it's not a trap to be avoided at all cost. It's an excellent sign that they have the personal control to reach their own financial success and accomplishments.

Do you think mastering credit is a necessary part of your journey to financial independence? Is credit an important tool in your financial arsenal or a deadly way to play with fire? What makes it so?

More about...Credit

Become A Money Boss And Join 15,000 Others

Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)

Yes! Sign up and get your free gift
Become A Money Boss And Join 15,000 Others
guest
56 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
JoDi
JoDi
4 years ago
Reply to  Chzplz

They’ve only accepted the American Express card and debit cards for years, but that’s about to change. They’re switching to VISA soon.

Carla
Carla
4 years ago
Reply to  JoDi

Do they take debit, at least?

William Cowie
William Cowie
4 years ago
Reply to  Carla

Yes, they do.

Chuck
Chuck
4 years ago

I think credit cards can be a powerful tool if you have a complete understanding of the mechanism and the restraint not to abuse it. We managed to pay for Christmas gifts last year using accumulated rewards points. Since we don’t accrue interest on the card then it’s a nice benefit.

Beth
Beth
4 years ago

IMHO, the one way to avoid getting screwed by credit card companies is to have a “take it or leave it” approach to credit cards. Those companies need me, not the other way around. I grew up in a household where my parents didn’t buy anything unless there was already money in the bank to pay for it. I was indifferent to credit cards for that reason – it was just a payment method to me. I only got a credit card my last year of university in order to start building a credit history. I made a purchase and… Read more »

JennK
JennK
4 years ago
Reply to  Beth

@Beth: Love this comment. Especially the part about being “indifferent” because “it’s just a payment method.”

To be perfectly honest, I struggle to come up with any objection to credit cards that doesn’t come down to “I can’t be responsible with them.” And when people are up front about that being the problem, I’m like “Well then I totally understand why you got rid of your credit card. Very smart choice.” I don’t buy the argument that they’re inherently bad for EVERYONE, though.

jestjack
jestjack
4 years ago

What a great article! I am a “fan” of credit cards WITH rewards. The very computer that I am typing this e-mail on is the result of using my credit card for everything I could and then using the “earned rewards” to “purchase” the computer with “points”. It did not cost me a cent out of pocket. Fair to point out I pay in full every month. In addition, some CC companies will extend the warranty on a product if purchased with their card. I’ve had Amex intercede twice when a product failed after the initial warranty had expired but… Read more »

EdH
EdH
4 years ago

The problem is people spend more with credit cards. MIT sponsored a study on this, and McDonalds confirmed that for every ring on their cash register, a credit card user will spend 12%-18% more, which easily wipes out the paltry benefits/rewards you are earning. Even those that pay them off every month are still really in debt. If you have a credit card with a few thousand on it for your monthly expenses, and you lost your job and all sources of income, would you have enough cash to pay the credit card company today? Some might with their emergency… Read more »

Beth
Beth
4 years ago
Reply to  EdH

You make a really good point about how people could be in debt even if they pay off the bill every month. If you don’t already have money in the bank ear-marked for a purchase, it’s debt.

lmoot
lmoot
4 years ago
Reply to  EdH

I don’t question that it happens….but I question that it happens as often as people like to claim it does. It CAN cause SOME people to spend more. I skimmed over the study in question and what struck me (besides the fact that it’s 16 years old), is that it appears they did the study with only 1 representation of the population….1st year grad students. I mean come on. Of course they will spend more with cc’s. They probably know they can’t afford to pay in cash because of a combo of lack of income and school expenses. And likely… Read more »

lmoot
lmoot
4 years ago
Reply to  lmoot

Here’s the study btw. If I’m allowed to post it:

http://web.mit.edu/simester/Public/Papers/Alwaysleavehome.pdf

JennK
JennK
4 years ago
Reply to  lmoot

Imoot: Thanks for looking into the study and sharing with the rest of us! I see now how NOT widely applicable it is. And it’s not (only) because it’s about a select set of people (grad students), but, for starters, because it’s about McDonalds and NO other types of spending. Like you, when I think of McDonalds’ clientele, I don’t think “these people are wise with their money.” (That applies even to me, if I go in there! Which I do, on rare occasions, but I know while doing it that this is a splurge on an unhealthy delight, a… Read more »

JennK
JennK
4 years ago
Reply to  EdH

@EdH: You write “Even those that pay them off every month are still really in debt” (b/c they might miss the payment if they lost their job), but this misses the whole point of the article, which is to use CCs wisely. The biggest rule is “Do not buy anything if you don’t already possess the money to pay for it!” What you’re talking about could only happen to a person who breaks this rule, i.e. who treats a credit card like a loan. (Even a month-long loan = a loan.)

EdH
EdH
4 years ago
Reply to  JennK

Everyone can rationalize that *THEY* are the exception, and that they use credit cards wisely, that these studies don’t apply to them, that the study is flawed, or represents a bad sample, or whatever. There are studies, and articles by psychologists on how spending with credit affects the brain differently than spending with cash. http://www.jcr-admin.org/files/pressPDFs/111411131134_chatterjee–article.pdf https://www.psychologytoday.com/blog/the-edge-choice/201207/the-way-we-spend-impacts-how-we-spend But hey, they are the ones with the PhDs, but have the flawed analysis. I’m not trying to convince you to give up credit cards. You’ve convinced yourselves you are right, the studies are wrong and/or flawed. I haven’t done a study. I can… Read more »

JennK
JennK
4 years ago
Reply to  EdH

Sounds like you’re signing off, but for anyone following: 1. I did concede that I suspect that people spend a bit more with ccs. But I’ve also said, every time I’ve conceded that, that I think this difference would be irrelevant if you had a budget. 2. Regarding your “challenge”: I already know I’m never floating. My liquid assets are worth far more than my cc bill any given month. I’m not saying that to brag (though I am damned proud of it, seeing as I just finished an expensive grad school program), AND it doesn’t mean all my spending… Read more »

lmoot
lmoot
4 years ago
Reply to  EdH

The only reason why I may not have enough cash in checking to cover my daily credit card purchases, is because I move cash into savings as soon as I get my paycheck. I only leave enough in there for my cash obligations (mortgage and the next cc payment that’s due, and a few hundred for random cash needs that may arise). I always try to keep the minimum in checking for a couple of reasons: 1) I know I’m not going to need it because I’m paying most things on the credit cards, and I have it set up… Read more »

Michael
Michael
4 years ago

I charge EVERYTHING I can simply because of the rewards/protection. Nowadays, I can full pay when the bill comes so no issues there; I also know what an average month should be and can spot items that are out of the ordinary but that comes with time/experience. However, when I first started working and money was tighter, I would simply pay an item the day after it posted (or the next weekend when I had the time). As a result, I could not overspend because I was treating it like a debit card. Yes, it did add another step, but… Read more »

Allan @ The Practical Saver
Allan @ The Practical Saver
4 years ago

I believe credit card can be your best friend or your worst enemy. If you are responsible in handling or managing your credit cards, then, you likely will get the benefits from the credit cards (i.e. rewards and increased in limit for credit reporting purposes).

It can be your worst nightmare if you don’t handle it properly. If you just continue on charging and not paying the amounts in full, then, you are looking at paying interest. If you fail to pay on time, you are looking at penalties and spike in your APRs.

Ryan Mercer
Ryan Mercer
4 years ago

“In general, there are more establishments taking debit and not credit than the opposite. Therefore, a debit card opens more doors for you than would a credit card.”

I’ve never been somewhere that did NOT accept credit cards…

Scooze
Scooze
4 years ago
Reply to  Ryan Mercer

Aldi doesn’t take ccs, I don’t believe.

Donna Freedman
Donna Freedman
4 years ago
Reply to  Scooze

Aldi had apparently taken them in some stores, but very recently announced you can now use credit everywhere.

William Cowie
William Cowie
4 years ago
Reply to  Ryan Mercer

Perhaps someone else has had success using credit cards at Costco, but I haven’t. 🙂

Victor Reiner
Victor Reiner
4 years ago
Reply to  Ryan Mercer

Costco currently accepts American Express cards (they offered a Costco-branded Amex which I’ve had for about 5 years), though that agreement expired and they will stop taking them after March 2016. They made a new arrangement with Citibank and will accept all Visa cards some time this year.

Here’s an article talking about the changes: https://www.nerdwallet.com/blog/credit-cards/costco-amex-cardholders-get-new-card-number-not-new-account/

stellamarina
stellamarina
4 years ago
Reply to  Ryan Mercer

Many little mom and pop stores and restaurants will not take credit cards. On the other hand, in Iceland the whole place takes credit cards so that you can visit that place and never need any local cash in your pocket.

Beth
Beth
4 years ago
Reply to  stellamarina

There are quite a few small businesses where I live that don’t take credit cards. The fees are too high for them. Since I essentially use my credit card like a debit card, that doesn’t bother me at all.

Major retailers get discounted rates because of the volume of transactions they have. Do I feel guilty using my credit card for Amazon? Not at all. But I wouldn’t use it for a local small business.

Jeff
Jeff
4 years ago
Reply to  stellamarina

I’ve run into very few who don’t and most simply require a minimum purchase size to make the fees to them worthwhile.

Rob
Rob
4 years ago

I started using YouNeedABudget this year and even though it took me a little while to get used to the way it handles credit cards, now that I am comfortable with it I find it really helpful. As you spend money in various categories, the credit card spending you do shows up as available to pay the card balance down. If you spend more on a credit card than you have budgeted for a category, it warns you that you will incur credit card debt, but still allows you to do that is you have to.

Pamela
Pamela
4 years ago

My husband and I use our credit cards for online shopping and other larger purchases. We always pay off our debt before the grace period is over though. Makes life simpler that way.

Karthigan Srinivasan @ StretchADime
Karthigan Srinivasan @ StretchADime
4 years ago

I was in deep credit card debt way back in 2000. It took three years to get out of that debt hole – http://stretchadime.com/getting-out-of-debt/. I was closing credit cards as I paid them off. I kept one for emergencies. Then for a three year period, I only used debit cards and checks. This was to impose discipline on myself – to live within my means. Over this period, I was able to gain confidence and believe in myself that I could actually live within my means and save money. Then cautiously, I started using one credit card. The discipline followed… Read more »

JennK
JennK
4 years ago

Good to see a sensible post about credit cards, rather than one demonizing them. And to the person who commented “Even those that pay them off every month are still really in debt” (because they might miss the payment if they lost their job or whatnot): That’s true only of people who break the “Treat it like money, not a loan” rule. (A few-week loan is still a loan, is it not?) The only anti-credit card argument that gives me pause is “Studies show that people using credit cards spend more freely.” But that could be handled by budgeting, I… Read more »

Dan
Dan
4 years ago

Credit cards can be a big boon to your cash flow if you can leverage the right reward offers. The trick is to not overspend and always pay off the balance every month. I have one credit card for groceries/gas that returns about $50.00/month to our family. On top of that I use leverage various credit card for major purchases. I easily make over $1000.00/year this way and sometimes much more depending on what we purchase. For major purchases I will move money to a savings account to reserve it for paying off the credit card. I don’t buy on… Read more »

Latoya @ Femme Frugality
Latoya @ Femme Frugality
4 years ago

I believe credit has the potential to be both. It can be a tool in any financial plan and it can be destructive as well. It all depends on the person and if they actually know their stuff when it comes to credit.

Laura
Laura
4 years ago

Back In The Day one could take or leave credit cards, but now I think mastering their use is an essential part of financial management, despite the fact that I hate them. (1) They’re necessary for online purchases; you can’t get on the internet and write a check or fork over dollar bills. Yes, you can use debit cards, but overall credit cards provide more security against fraud and/or holds on one’s bank account (there are probably exceptions, I am generalizing). (2) Salaried workers are usually paid once a month on the last day or the first day, and it’s… Read more »

Katie
Katie
4 years ago

This is a great discussion! I’m one of those folks who doesn’t use credit cards all that often.Yes I know I’m missing out on beaucoup rewards and some fabulous trip in first class :-), but I also love the discipline that comes from spending good old fashioned cash (via debit card) for everyday items.

Frugal Turtle
Frugal Turtle
4 years ago

Thanks to a spendypants ex-boyfriend, I had about $8K in credit card debt 8 years ago. After I broke up with that boyfriend my parents were generous enough to give me enough money to pay off my credit cards. I closed a couple of them that the boyfriend and I shared and kept one. I didn’t use it for about a year and just payed for everything with cash/debit. Once I felt financially secure again, I slowly started using the credit card and payed it off every payday. I’ve been doing that ever since and it’s worked great. It’s a… Read more »

Jeff
Jeff
4 years ago

Having a credit card since I was 18 and always paying it off on time is a big reason as to why I have so much of an easier time getting low-interest financing on my cars and house than my peers with little-to-no credit history. I also prefer to use a second card for paying recurring bills and utilities whenever it is possible, I’ve had many problems with a auto-debit failing for no apparent reason or it occasionally happening early one month before I had put the funds into the account. Billing it to a card and making one payment… Read more »

BD
BD
4 years ago

Huh. With interest rates for savings accounts and CDs so low, the only way I make money these days (besides at my job) is to use my credit and get 3% cash back. I have a great credit card (AMEX Blue…Amex is getting desperate these days), so they’re offering great rewards) that gives me 3% cash back on grocery purchases, 2% cash back on gas, and 1% cash back on everything else. I opened the card in October 2015, and now it’s February 2016, and I have earned $105 already….without changing my spending habits. I only buy what I need… Read more »

Frank
Frank
4 years ago
Reply to  BD

I have credit cards with the major four providers. Three of them all operate the same way with credit balances. They hold the credit for a while then send you a check for the balance if you don’t use it. Amex is the only outliner I have experienced. Several times I have had a credit balance and they held it on there for one month. IF I don’t spend it or call them to get a check — THEY TAKE THE MONEY. No continued credit for the balance, no check in the mail, nothing. I wasn’t sure what was going… Read more »

BD
BD
4 years ago
Reply to  Frank

Wow, that’s freaky. Thank you for the heads up. I’ll have to look into their fine print. So far, I’ve had the AMEX card since October 2015, and racked up $107 in cash on it. It’s been there and hasn’t disappeared. But now I need to check into the time limit statutes for it.

Barb
Barb
4 years ago

Without jumping too deeply into this argument/discussion, I will just observe 3 things. 1. For the person who justified using the cc online for security, I use a visa logo debit card and as long as I use it with a signature rather than a pin I have the exact same security as a cc. And 2. I have on more than one occasion rented a car with my visa or Mc debit with absolutely no problem. 3. My personal experience is that I spend less with my debit visa than cash, but that’s just me.

Beth
Beth
4 years ago
Reply to  Barb

The bank where I have my checking account doesn’t offer Visa, but this is good to know!

Frank
Frank
4 years ago

I wanted to comment on the “people spend more when they use credit cards” meme. This is both true and false for me. On the one hand, I don’t use cc very much, but when I do use them it tends to be for large purchases. I don’t use checks*. So if I am going to go buy a washer, dryer, refrigerator, etc., I am probably going to put it on a cc or debit card. I almost exclusively use the cc for large purchases so of course it appears that I “spend more” on my cc purchases than in… Read more »

Chris
Chris
4 years ago

I’m in a pickle with CC debt right now, but I realize the utility of having a card … spend wisely folks!

Ramona
Ramona
4 years ago
Reply to  Chris

Sorry to hear about your predicament. It’s the same reason I am scared of getting a credit card, I’m afraid I might be spending too much and get into debt.

Giovina
Giovina
4 years ago

I think credit cards are very useful when used appropriately. I set mine to pay most of my bills automatically so I don’t have to keep track of as many due dates. I also always know the balance on my card and give myself a limit each month so I am still controlling my spending. I have never paid interest and never charge anything that I don’t already have the money to pay off, so I don’t know or care what my interest rate is. I have been building my credit since I turned 18 and so far I have… Read more »

Savenospend
Savenospend
4 years ago

The sad thing is how fico has come into play with car insurance and employment, amongst other things. I have seen rewards programs – as a banker – and you really have to be nearly affluent and run all your cash through the credit card for paltry earnings. I have had numerous customers see earnings swallowed by interest if they don’t make a full payment. The CC companies clearly know it’s a come-on, they know they will continue to earn profits in comparison to any amount they pay. But it sure sounds good to mobey pundits on paper, so they… Read more »

Jamie @ Medium Sized Family
Jamie @ Medium Sized Family
4 years ago

I think this is a case of “know thyself”. If you have proven more than once that you can’t grasp the finer points of credit cards and that, more often than not, they wind up being a trap against your finances, you’re better off swearing off of them forever.

This is a hard lesson for some of us to learn! I’ve had to take this class more than once, sadly. Once we dig out of our credit card debt, you will find me in the no credit cards crowd.

Matt Gallant
Matt Gallant
4 years ago

Credit cards a double edge sword.

And if people don’t have the discipline to use them properly, it can be deadly. Unfortunately, it’s becoming common for people to bury themselves in credit card debts.

For those that have the discipline to PAY IT OFF EVERY MONTH, you can make 1% to 3% back with points and rewards… and build a good credit score (which you can leverage for buying assets later.

Don
Don
4 years ago

To me its like a rat running in a wheel. Use a credit card to “build my credit score” so I can use my good credit score to buy more things on credit, that builds my credit score. If you pay in cash for your cars (you do NOT have to get a loan to buy a vehicle, you have to get a loan to buy one that you CANT afford) then you wont have to have a good credit score. Also a credit score tells NOTHING about your financial health what-so-ever. All it does is tell how much you… Read more »

MW
MW
4 years ago
Reply to  Don

What about the advantage of rewards cards? If you are responsible enough to essentially treat a credit card as if it were a debit card, you receive free rewards for spending the same money you would have spent anyway. These rewards can come in many forms such as airline miles or straight cash.

Another benefit (that must be carefully managed) is the flexibility credit gives. If you don’t happen to have cash for an emergency purchase such as a car repair, utilizing a credit card can buy you 30 days before it incurs interest.

RandomJane
RandomJane
4 years ago

I’m probably in the minority. I’ve never had a problem with credit. I worked for a credit card company in college and learned how not to do it. I find that if I carry a small balance of $100 – $200/month I actually spend less in the long run and it helps my credit score. Knowing I have a balance makes me stop and think about whether I really want to add to it. Sure I could easily take money out of savings and pay it off, but having the balance works for me psychologically to keep me from spending… Read more »

Jon
Jon
4 years ago

Great article. The point is — spend within your means. We’d add that while spending within your means, you should also maximizing the rewards you earn! So we built a free tool to show you how at Reward Stock. We’ve taken the same philosophy in this article and combined with some smart automated strategies we’ve been able to do some pretty amazing vacations paid for with rewards instead of cash.

As long as you are a responsible user of credit, boy is there a lot of rewards value out there 🙂

Francisco
Francisco
4 years ago

Using credit cards can be very good if used wisely. I generally use my credit cards for 3 things: 1. Create a credit score which will help to buy my first house at good rates. 2. Receive cashback at the end of the month. 3. Rent cars. When I go to long trips I prefer to rent a car. Some companies ask for a credit card. The trick is to pay all the money at the beginning of the next month so you don’t need to pay any commission. If you start being in debt, it will take more effort… Read more »

Get Rich Slowly
Get Rich Slowly
4 years ago
Reply to  Francisco

This is a good list Francisco and one I follow as well, though I will say I’ve rented cars on a Visa debit as well with no issue.

John McLane
John McLane
3 years ago

Using credit cards is not good *AT ALL*. If you can, use cash. By using credit cards you give more money and more power to the very institutions that make your daily life a nightmare. Consider the fractionary reserve system and the damage it inflicts. Cash is the best, has ALWAYS been, ALWAYS will be best.

shares