What are the cons? The pros are I hate seeing multiple small charges every day for shit like coffee, gas etc and this would eliminate that...I got to thinking why not just put that stuff on a credit card and pay it in full each month (I will for sure pay it every month). What am I not thinking of or missing?
I use my credit card as a charge card. Pay it off every month so no interest is accrued.
As a result, I always have at least $100-$200 in free reward points every month. It's a win-win for me
As a result, I always have at least $100-$200 in free reward points every month. It's a win-win for me
I use card for everything. It's too easy to use but I get stuff for using it. Just need to pay it off every month.
Damned things been on fire lately, Jeep builds aren't cheap.
Damned things been on fire lately, Jeep builds aren't cheap.
The biggest downfall of credit cards is even if you don't use them, the cost for the retailer is built into their pricing. There's a machine fee, a processing fee, and a return fee. Stores have to charge more for everything to compensate and you pay that even when using cash.
Prices have risen 3-3.5% just to cover the transaction costs. It's like an extra sales tax directly to banks.
The people that can't pay them off is a huge cash cow, but doesn't affect people who pay them off like the fees do.
Prices have risen 3-3.5% just to cover the transaction costs. It's like an extra sales tax directly to banks.
The people that can't pay them off is a huge cash cow, but doesn't affect people who pay them off like the fees do.
This is what we do as well. We have a monthly budget and stick to it. I won't use a debit card as that's a direct pipeline into my bank account if its compromised. The credit card assumes all the risk.
I use a CC (Southwest or United) for 90-95% of my purchases year over year and pay them off prior to being charged interest. Only con is my United has a yearly fee ($95) but considering I have 275,000 frequent flyer miles and don't have to pay a luggage fee when we fly I can live with the yearly fee of $95 and we use the SW CC more often (to rack up frequent flyer miles) when flying domestically but now that the kiddos are out of the house we have two upcoming flights next year (one to NC and one to Europe) and both will be free round trip by using United Miles. The only other Con I can think of if you’re not disciplined to pay off the card prior to interest being charged Or you have an unexpected catastrophic issue that requires $$ and that $$ gets used by the planned CC pay off only to be used for the unexpected/unplanned expenditure which results in your charged interest. So, another reason I keep an emergency fund in a MM account of 5-6 months.
The only downsides really are for those that misuse them (don't pay them off), otherwise it's all just bonus. Free flights, cash back (e.g. a discount), hotels, etc - just find the ones that work for what you want them to. I'll be at TJ fest two years running just on points from one of my cards.
That's how I do it. And I use different cards for different categories to help me keep track of myself. All of it gets me points on things I normally use or at least cash back.I use my credit card as a charge card. Pay it off every month so no interest is accrued.
As a result, I always have at least $100-$200 in free reward points every month. It's a win-win for me
We do category cards too but sometimes life is too busy and we forget a month. For everything else, the Citi Double Cashback card is king at 2%. Fidelity has a similar 2% card too which encourages saving.
There's other benefits too such as rental insurance, price matching, and extended warranty. I've had to use these before and it was super easy as long as the paperwork is followed.
Virtual credit card numbers are also awesome for signing up to subscription services that are difficult to cancel.
My favorite was the Chase Sapphire card we had a few years ago. The sign up bonus paid for a plane ride across the world, entry into airport lounges (awesome for long layovers) and free meal/drink credits at the lounge bars. It cost a fee after the first year so we dropped it.
There's other benefits too such as rental insurance, price matching, and extended warranty. I've had to use these before and it was super easy as long as the paperwork is followed.
Virtual credit card numbers are also awesome for signing up to subscription services that are difficult to cancel.
My favorite was the Chase Sapphire card we had a few years ago. The sign up bonus paid for a plane ride across the world, entry into airport lounges (awesome for long layovers) and free meal/drink credits at the lounge bars. It cost a fee after the first year so we dropped it.
With cash you spend it and it's gone. Spend more than expected and the impact on your wallet is obvious. Nothing in your wallet changes when you use your card.
The risk is that you spend more than intended.
The risk is that you spend more than intended.
After that it's a question of the fee to reward tradeoff. But fortunately in the chase family you can transfer points around fairly easily.
I’ve had a Delta Reserve card for many years, between the club access and free flights it’s more than paid for itself.
If we traveled by air and stayed in hotels more it for sure would have paid for itself to keep, but we just don't much.
Using a CC encourages more spending. Their is a negative psychological connotation with pulling money out of your pocket that doesn't exist when you use cash. You don't "feel" like your spending the money, so you spend more.
Those perks and benefits they offer are designed to make it even easier to spend.
Those perks and benefits they offer are designed to make it even easier to spend.
I'd argue that's not due to the nature of the card, but using any card. It's much more prevalent when you watch the wallet thin than just hand over a bit of plastic.
Very important to keep this in mind. However the opposite is also true. I've discussed this before with friends and we found that everyone feels differently and some people aren't affected by spending physical cash vs credit card.
Similarly, it can also be easier to notice pricing mistakes when the cashier asks for $40 and you have to count it out, rather than being absent minded and hand over the plastic for whatever amount the cashier said.
For me it’s almost opposite, cash may as well be Monopoly money to me… I pay attention to an account balance much better than a wad of cash.
Cash always seems to disappear quickly so I try to not carry it.
Interesting. I find physical cash just collects in my pocket until I end up going to the bank to deposit.
I also find it extremely difficult to keep track of spending with cash. With plastic I can always see exactly where I'm at.
I've been made fun of using a credit card for $1 purchases at McDonalds, but I find it easier all the way around.
I use a card for everything from a $2.00 cup of coffee to several thousand $$ purchase. My personnel card is generally $4500/month and business card goes from$7K to 20K+ every month. Always pay it off every month, Have almost 900K points between the two.