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The Main Reason We Use Credit Cards…

May 17, 2011

There are posts and articles all over the blogging and financial work that call for a person to cut up the credit cards. And I agree. Kind of. Well, not really. I like to use my credit card, and we use it for almost everything. I even tried to use it to make our house payments (they wouldn’t allow it). 

We have two credit cards. We use the first one for almost every purchase, and each transaction goes directly into Mint. The second card is only used when a store won’t accept the first card. The second card is lame, gets no cashback, and we barely ever use it. It is tracked by Mint, too, just in case…

First off, we only use the card if we can pay it off, in full, every month. As long as we’re tracking our spending, this is no big deal. There is never a time that I think, “We don’t have the money, so I’ll put it on my card”. If we don’t have the cash, we don’t buy it.

Secondly, and the real reason for us using the card, is the “Cashback” program we’re in. It is a pretty average cash program (I’m sure there are better ones), but it is easy to use. Right now, there is about $120 cashback money on our card. We usually use that money to pay part of our card’s balance. I’d like to use some of the money for gift cards (which gives you better deals…like $45 in cashback money buys you a $50 gift card from certain places). We bought our video camera with only cashback money a few years ago. Maybe this is how I’ll pay for the iPad! I’ll probably just pay off part of the balance with that money. Boring, I know.

Third, we never, ever, buy stuff just to get free cashback money. That would just be stupid. If I spent $1000 just to get $10 cashback, I’m not really good at math, or logic. But if we are spending the money anyway, I might as well get 1%-5% back on each purchase…

If I had a large balance that I wasn’t paying off each month, I’d cut those bad boys up right now, get all of the balance paid off, and then wade back into having one or two cards, without ever leaving a balance on there month to month…

If you are anti-credit card, I totally applaud you…especially if you cut up the cards to avoid spending. But if you have your spending under control, using a credit card is a great way to earn free money.

Here’s a recent blog post from “My Money Blog” concerning using your card for air-travel mileage…I don’t use these types of cards, but if you travel a lot (or want to) then this may be a way to get a few free miles…

What is your attitude about credit cards?

6 Comments leave one →
  1. Desi permalink
    May 17, 2011 10:02 am

    I’m pretty much on the same page as you. We have a credit card which we use regularly, pay off monthly, and receive cash-back bonuses. My biggest challenge is taking my card grocery shopping. I fill my cart and quickly loose any sense of a budget because I can rationalize almost any purchase (we gotta eat!). And since we have a healthy savings account, we’re not at risk of carrying a balance so what’s the big deal? The big deal for me is that it makes my monthly grocery budget obsolete. I guess what I’m saying is when I have a credit card it is much easier to exceed my budget and thus its harder to save for what I really want, like an Ipad 2. (Oh wait, I got one for Mother’s Day. Luv it!) If I came with cash, I’m more likely to stay on budget and make sure my purchases are intentional and of the greatest value. The other bird with this stone is often the 1st items that are nixed from my cart are the sweets. Sorry Little Debbie, back to the shelf for you. If there’s something there that would be appropriate for food storage, that’s fine to purchase with a card, but that needs its own category.
    This theory also applies when eating out or a few other things. For example, I’ll say, we have been good so let’s eat out tonight. If we only intend to spend $50 in cash I’m less likely to order the raspberry lemonade or desert, so that I can still get the prime rib which is really why I came. If I knew we’d be using our card, I’d get both and our bill would creep up into the mid-sixties (and so would my waistline) for stuff that really doesn’t improve the eating out experience.
    Bottom line, if you are disciplined enough to stay on budget with a credit card, swipe away, if you’re like me, use cash in your weak places. Oh, I did I mention I have an Ipad? Luv it!

    • May 17, 2011 12:37 pm

      Thanks for the comment! Good idea, too, bringing cash…The credit card does make it easy to blow your budget little by little because it doesn’t seem very immediate (if you don’t see your credit card balance until the end of the month)…great idea!

  2. Bonnie permalink
    May 17, 2011 1:31 pm

    Big fan of the credit card cash back program. We opt to cash it in for gift cards for places we are going to buy stuff anyway, then it is a double bonus because you get free cash on top of the free cash. One of the best things about my card is that I get %5 cash back from purchases made in a specific category during each month (thus the reason why we decided to finish our bathroom at this time…%5 cashback at home improvement stores can add up to a lot when you are doing a big project). I don’t worry about sticking on a budget too much when grocery shopping because I go with a list and really try to stick with only what is on my list, that helps me to stay on budget, not bringing cash. Plus, I get %5 cash back at grocery stores next month. Who wouldn’t want to get free money for food you are going to buy anyway?!

    • Bonnie permalink
      May 17, 2011 1:54 pm

      Oh, and did I mention I got $100 cashback just for signing up for the card? I think they are banking on those people who don’t pay their cards off every month, how else can they afford to give everyone free money?!

  3. tboy permalink
    May 22, 2011 7:44 am

    So do you use the credit card to pay other bills like cell phone, gas, power, etc? If so, do you go to the companies website to pay it, or how do you go about doing it?

    • May 24, 2011 10:03 am

      Yes, I just go to their website and set it up. It is usually under “account” or something like that. I choose the card, and the date I want it paid, etc., and it should be good to go. I set it early enough in the month that if there is some problem, I have weeks to fix it without some late fee… It is working pretty well! 🙂

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