Credit Cards: A Love Hate Relationship//Post #4: Why Credit Cards CAN Be Awesome
This post is part of a credit card series & I want your input!
Click the button at the end of the post to ask me all your burning credit questions.
For those of us with a bad history of abusing credit cards (cough, cough, ME), it can sometimes feel easier to just pay for everything via debit or cash. Paying with a debit card is safe. You know exactly how much money you have and you know how much you’ve spent because it is simply not there anymore. When I finally ended my rollercoaster relationship with credit card debt a few years ago, I was determined to never let it happen again. In my mind, the best way to do that was to avoid credit cards like the plague. So, for the last several years I have primarily used debit cards for this very reason. I had exceptions to my rule -- flights always go on my Southwest card, for example -- but for the most part, I only used debit.
After several years, I feel mostly healed from my toxic relationship with plastic and ready to dive back into the wonderful world of credit cards and, let me tell you, it FEELS GREAT.
Credit Cards are Wonderful Because:
The rewards (can be) real! I earn cash back or miles on every purchase I make with a credit card
You can time out purchases better. I own a home in New Orleans and have rent to pay in L.A.. That means that on the 1st of every month, a whole bunch of cash leaves my account. I also always have incoming money that hits my account just a few days later. Using credit cards until that money comes in relieves my stress from seeing shrinking checking accounts. (P.S. I sometimes still pull from savings for a few days just to relieve my stress)
Credit cards have better consumer protection regulations, which means that you are protected if someone makes fraudulent purchases on your card
When you use credit cards well, your credit score goes up, making it easier to get loans in the future
I’m still me though and I know that I have a tendency to live big in the moment.
That means that I have lots of systems in place to make sure I don’t get myself into a pickle again.
My tried & true systems that you should steal:
Set auto payments for at least the minimum amount. This way, even if something goes wrong and you can’t pay the balance, you won’t get dinged for missing a payment.
Pay off your weekly spending on credit cards every Friday
Set reminders to pay off your statement balances before the due date
TRACK YOUR SPENDING! It is really easy to overspend on credit cards if you don’t know how you typically spend money