I know a lot of people are afraid of credit cards. They mostly fear not paying the balance off monthly and getting socked with steep interest payments, or having their credit card information stolen.
But other people people embrace credit cards as a great way to keep track of all of their purchases trackjing monthly spending. Another perk to credit cards versus paying cash for everything, if if you use credit, you have credit when you need it – be it an emergency or when you purchase a car or a home.
Another benefit to using a credit card can be the perks offered by the credit card companies for purchases made.
For instance credit cards have rewards that give:
● Cash back on purchases
● Product rewards, such as gift certificates or items
● Free upgrade features hotels, airlines, trips and airport concierge clubs, plus more
It seems there is a credit card perk for just about anything if you look hard enough!
The perks really only work though if you were going to make a purchase anyway, will utilize the reward, and most importantly – pay off your credit card bill every month! After the first two months where you “break it in” by not paying the card off for two months (usually advised when you are just beginning to build credit) to “show a history” for the credit card agencies, I’m not certain there is ever a benefit to carrying a balance on an interest accumulating credit card. If your card is no interest (also usually an offered perk for a limited time), sure ride that balance – provided that you can pay off the entirety of the bill just prior to the interest kicking in.
Do you have a credit card with a great reward? If so, what is it, and would you recommend the program?
Note: this originally appeared on Coupons, Deals and More.
Stephanie K says
First let me start by saying that I feel about credit cards the same way I feel about gambling, for most people it’s just a bad idea and they should stay away! That being said, I’ve had a Discover card since I turned 18, and I’ve never paid credit card interest. I really wish I could add up all the money I’ve gotten back from using credit cars, but I know that last year alone we earned $357.81 from three cards. We use credit cards to pay for everything. (Okay, I’m compulsive, I just ran a report. Since we started tracking our finances electronically in October of 2000, we’ve earned $3,026.76 cash and that doesn’t count the few gift cards I’ve redeemed for in place of cash when they’ve been “on sale”, like $45 for a $50 CVS or Home Depot Gift card) At this moment I have a Discover it Card (the same card I’ve had for 16 years, I just called and had them switch it, since the program for “it” seemed better), a Citi Dividend Card, a Chase Freedom Card, and a BankAmericard Cash Rewards Card. The first three have 5% cash back categories that change quarterly which can be a pain to remember, but even if I forget, I’m still earning 1% on every purchase. I got the Bank of America card last year so that when there isn’t a 5% on gas or groceries I can get 3% and 2%, respectively. I’ve heard it said that even people who pay off their bill every month are more likely to spend more when they are using a credit card vs. cash, but for us it works.
Ann says
Stephanie that is amazing!
I have a delta rewards card that I can use to fly for free… only problem is I stopped flying a few years ago. I think it is time to move on from that card. Hubby has a Starwood preferred card, and that is fabulous! We are always getting free hotel nights. We went to Philadelphia a few weeks ago – free hotel. Traveled across country – free hotel. Like you we pay off monthly to this is just gravy. That is my favorite card!
Ann
Debb F says
PHHHHHHHTTTT! What is this Ann you were in Philly and did not call??? OMG> I am just about 30 minutes down 95. Please if you ever are in Philly or Wilmington DE for anything let me know so I can stop buy and give you a hug and do lunch or something, OK?
admin says
I did not know you were that close! Will do, Debb.
Ann
Candie says
About 5 minutes ago I was reading my ShopSmart magazine, great article about credit cards, they said for airline miles go with the airlines cards but you will have trouble finding dates you can fly. They talked about cards that are offering free checking accounts, I think Capital One was one of them. Earn 5% interest but you need to read the fine print, that is only good for 1 year and then it drops down to the regular interest rate and must maintain a $5000 balance. ShopSmart stresses to read the fine print and I always do. I have 1 card and pay it off every month and if earns 3% cash back but only on certain things.
admin says
I think it depends on the card, Candie, ie, airline redemptions. I can either use the points to buy in-date, or use the points on any date on a dollar-point exchange. In other words, I never have a black out. I can fly using my points the day before Thanksgiving if I like. I can also buy for other people using my points.
Ann
Barbee says
Citibank Dividend card.
The reward is cash. Cash checks mailed to your house . Sweet.
I have not paid interest on this account in AT LEAST 20 years. Originally, I felt guilty about getting paid to use their credit card…so I called them and talked to them about my concerns.
They emphatically said that it is perfectly okay that I get dividends on a card that I never pay interest on-it is not cheating or stealing. [Phew!]. They get their fees elsewhere and they are delighted to have me as a customer w/ their Citibank Dividend card.
Nice people! I recommend them to everyone who needs this type of service.
P.S. This is NOT you Mommy or a Gov’t giveaway program.
This is a BANK. You take money from a BANK , you are expected to pay it back.
…..& don’t anyone get all offended by that-we all know at least 1 person who thinks/acts otherwise.
admin says
I think we have that one too, Barbee. I’m not sure we use it much… I like it for the one-time-use online credit cards Citi provides when on online shop.
Ann