Credit Cards

Almost everyone has credit cards, but almost no one is responsible enough to have one. I personally believe it is okay to a have a credit card if you have enough self control with it. My husband and I use our credit cards like debit cards and pay off the balance at the end of the month. This allows us to avoid ever paying interest on the card. We never put more on the card than we have in savings - or even close to what we have in savings for that matter. Then why even use a credit card you ask? Well, the main reason we use a credit card instead of a debit card is because of the bonus cash back points. We get 1% cash back on everything and 2-5% on various items through the year such as gas, restaurants, department stores, etc. We also enjoy the protection the bank puts on credit card accounts. When someone uses the credit card number without authorization, we are not liable for any of the charges.

Here are a couple things to watch for when picking a credit card:

Make sure there are no annual fees - Our goal when having a card is to never pay the credit card company anything because well, we are cheap. Our credit cards have no annual fees and we never pay interest, so they never get any money from us. But, they do give us money.

Make sure the credit card offers at least some cash back bonus. We use our cards strategically. If we get 5% back on gas that quarter on one card but not the other, we make sure to use that card for gas. If the other has 2% back on restaurants vs. 1%, we will use the one with 2% back. 

Now, when you decide to cash out for bonuses, this is where the credit card companies can get you. We always opt for the CASH back and transfer it directly to our bank account. You can even apply it directly to your credit card balance. If you get a gift card or item with it, then you really didn't get cash back for your purchases. Plus, if you use your points for a gift card, you won't get a percentage back on the purchases at that store when using the gift card. 

Be careful that you are not using the cash back irresponsibly. Just because you get 5% at restaurants this month doesn't mean you should go out to eat every night. We buy everything like we normally would if that item was not a cash back special. For example, we don't drive more in the month when we get 5% back on gas vs. a month we would only get 1%.

You might call this cheating the system, but we just like to call it taking advantage of the situation. ;) If everyone used their credit cards like this, the credit card companies wouldn't make very much money.

The bottom line is, if you can use your credit card just like you would a debit card and never charge more than you have, I believe it is okay to have one. If you are an impulse buyer and tend to spend more when using a credit card, stay away from them!!!

I repeat, NEVER PAY INTEREST. Pay off your balance each month. You will waste so much money on interest if you only pay the amount you have to pay (the statement balance). Credit cards have really high interest rates, and this is how the companies make their money.

Disagree? Agree? Let me know in the comments.