Make credit a rewarding experience


There’s a lot of online buzz lately about using credit cards for the rewards. This is something I’ve been doing with success for a while and it’s a big part of my financial strategy. I use my credit card for every single purchase I make every day; large and small and earn about $1,200 a year in cash back rewards. That’s enough to over my entire Christmas shopping bill!

The danger, of course, is you run the risk of accumulating debt. The way to avoid this risk is 2-pronged. Obviously, the first part is, don’t just spend haphazardly. You need to stay within your budget even if you’re using your credit card.

The second part is to pay off the credit card promptly to avoid paying any interest (which would effectively defeat the purpose of using the card in the first place). There seems to be some debate about how often to make those payments. I pay mine daily. Sounds crazy, but it literally takes about 30 seconds of my day and this habit guarantees me:

  • Ultimate budgetary control: I immediately see what I or my husband has spent
  • I pay no interest: the purchases show up in about 2 to 3 business days so I pay them off before they accrue any interest
  • I can ignore the monthly bills: by checking the details of what we spend online daily and paying off new charges as soon as they appear, the monthly statement becomes moot
  • I catch any potential mistakes on my credit card statement immediately

If you try this strategy and find you can’t pay off the new purchases daily, then STOP using the credit card right away. Re-visit your budget. Something’s gone wrong. Take the time to fix whatever isn’t working on your budget (refer to video #2 in my Excel series) and then only use your card for things that are budgeted for.

So, which rewards will you choose? My American readers can use this awesome tool to see which card is best for them.

 For better viewing: click on the YouTube icon in the bottom right hand corner of the video’s window.


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