Did You Just Say To Use Credit Cards More?!
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| Sometimes You Can Save Money By Using a Credit Card! |
After my second book came out about a year ago, some frugal readers were not impressed with my advice to use a credit card that has a good rewards program for purchases. The advice in question is contained in Tip 15 of my free eBook: Pinch Like You Mean It! 101 Ways To Save Money Now.
My logic is that if you are going to make a purchase, you might as well get as many points as you can and effectively reduce the cost of your purchase. My rewards card gives points that I can use to buy anything on amazon.com. I use my points to get things for free that I would otherwise pay for, saving me hundreds of dollars every year.
Another benefit is that using a credit card is more secure than using a debit card or other forms of payment in case of fraud or payment dispute. I have been able to have charges removed from my bill a couple of times, saving well over $100.
The point that some of my disappointed readers made can be summed up as:
"Credit cards are bad. It is stupid to give advice suggesting to using credit cards."
I think credit cards are bad if you use them to buy things you don't need or to spend more than you can afford. However, I stick with the conclusion from my book- you can come out ahead using a credit card with a good rewards program if you stay within your budget and don't run up a balance.
I use a Citibank Visa card. There are other good choices available. If you are paying your balance off every month, then you don't need to worry about the interest rate on your credit card.
Another way to save money using credit cards is using a store credit card for a cash discount. I get 5% off of every purchase at Target and Lowe's by using my store credit cards.
I bought a refrigerator at Lowe's with my store credit card and the 5% discount amounted to some big savings from just this one purchase!
Even smaller purchases of groceries and other items at Target add up over time. Why not take 5% off if it doesn't cost anything. I always pay off my balance on these cards, so I have not paid any interest or fees.
If you can pay off your balance, why not take advantage of credit card rewards and discounts on purchases? The credit card company is betting that by offering perks that they can get you to buy more things and to pay interest on a credit card balance.
Prove them wrong and take their money!
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