When we read about credit cards, we often hear about the pitfalls and problems. There are plenty of dire warnings about credit cards — but that doesn’t mean I don’t use my credit card for as much as possible.
Credit cards aren’t all bad. In fact, they can be great financial tools. If you use your credit cards responsibly and as part of your regular financial plan, they can provide you with a solid array of perks.
Here are four reasons I use my credit card to pay for everything:
With credit card rewards programs, you can earn travel, merchandise, and even cash back.
I like using an airline miles card for most of my purchases. I even pay my rent each month with an automatic charge to my credit card. Just from my rent alone, it’s enough for a one-way airline ticket to just about anywhere in the United States.
By putting groceries, gas, and recurring expenses on my credit cards, I rack up the rewards. This reduces my overall costs when I redeem them.
Depending on your rewards program and how you use your credit cards, it’s possible to see a value of more than $1,000 a year, just by using your credit card to buy things you would purchase every day anyway.
2. Manage my cash flow
Sometimes you need a little help managing your cash flow. One of the reasons I love using my credit card is that it ensures that the money in my bank account is readily available. By putting all my bills on the credit card, I know that I have money freed up in my bank account for other purposes.
This was especially important when my monthly income varied. For years as a freelancer, I didn’t know exactly how much money I would make each month. If a client paid late, things could get tricky if I relied solely on my checking account.
Using credit cards can smooth your cash flow. You pay your bills with a credit card, and then you pay off your credit card each month when you know the money is there. Using credit cards can give you more control over when and how you pay for necessities.
There’s no way around it: A credit card is convenient. No carrying around bulky cash — instead, you just swipe one piece of plastic.
In fact, thanks to digital wallets, you might not need to swipe for much longer. Many stores are adopting technology that allows shoppers to use a smartphone to pay.
I also find credit cards are convenient when I travel. None of the cards I carry charge foreign transaction fees, so that means I can take advantage of the ease of paying while in another country.
Depending on where you go, it can be easy to simply swipe your US credit card and the currency conversion is automatically made — no need for a lot of foreign cash.
Credit cards come with their own protections. You aren’t liable for fraudulent charges made with your credit card, so you can avoid serious problems of that nature in the event your card or your account number is lost or stolen.
Even though your debit card comes with similar protection, the reality is that if someone steals your debit card and uses it, that’s still your money they’ve taken. You don’t have access to it until the situation is cleared up and it’s put back into your account.
A credit card is someone else’s money. They are on the hook from beginning to end when it comes to fraudulent charges.
There are other protective perks that come with some credit cards as well:
- Extended warranty that adds on to the manufacturer’s warranty.
- Price protection that allows you to recover the difference if you buy something and it goes on sale later.
- Extended returns. In some cases, even if the store won’t allow you to return an item, the credit card will reimburse you.
- Certain insurance protection for rental cars, lost baggage, and even trip cancellation.
Every credit card is different, so check your membership benefits to find out what to expect in terms of protection.
Make it part of your plan
In order to effectively use your credit card to pay for everything, you need to be disciplined and have a plan. If you aren’t careful, it’s easy to overspend and find yourself deep in high-interest debt.
Before you start using your credit card to pay for everything, create a spending plan that works for you. Never make a purchase just to get the points. You should always have a purpose, such as paying your phone bill, buying groceries, or fueling your car. Only use your credit card on planned purchases you can afford.
Every month, pay off your balance. Don’t charge more than you know you can pay for in a month. When you carry a balance at 15.99%, that outweighs even the highest 5% cash back rewards. You render all of your rewards, perks, and protections moot when you carry a balance — especially if you carry it for more than a couple of months.
With the right approach, it’s possible to use your credit card for every purchase and come out ahead. View your credit card as a tool and avoid getting into debt, and you might be surprised at the financial benefits.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 18, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 0318/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.54% – 7.12%3||Undergrad & Graduate|
|2.54% – 7.27%1||Undergrad & Graduate|
|2.67% – 8.96%4||Undergrad & Graduate|
|3.23% – 6.65%2||Undergrad & Graduate|
|2.69% – 7.43%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|