Dollars and Sense

Use Your Credit Cards: How to Streamline Your Saving & Spending

How many cards does one really need? To me, the answer is: two. One credit, one debit. Yes, there’s many articles out there about how credit cards are evil and you should never ever use one unless you want to end up $15,000 in debt (the average amount of debt per US household in 2014, but estimates vary).

Still, they serve a purpose, if you use them to your advantage.

Here’s a few things to keep in mind regarding our beloved rectangles of plastic:

  • Use your debit card/checking account for your bills ONLY (on auto-pay if you can, to avoid late fees on missed payments).
    • Pay things like utilities, rent, mortgage, car loans, etc. from your debit card.
    • Only use a check if you absolutely have to. They have your full routing and account number on them.
    • Don’t actually swipe your debit card at a merchant or use it online, but keep it for ATM withdrawals.
    • Decide how much you can save each month and have it auto-transferred each month into savings. Challenge yourself to increase the amount of each transfer every year.
  • Use your credit card for everything else.
    • Things like food, gas, toiletries, clothes, etc.
    • By paying for things this way, if your card number happens to get stolen, all you have to do is dispute the charge and replace your credit card. You won’t have to go through the hassle of setting up bill pay, auto pay, direct deposit, or ordering new checks all over again if you use your credit card as your primary method of payment. This will save you time, money, and frustration! 
  • Treat your credit card like debit.
    •  By paying it off every month you will avoid late fees and interest.
  • Set up text or email alerts.
    • They’ll let you know when a purchase is made. This is great if you don’t check your account every day.
  • Get a rewards card and start earning points!
    • Or airline miles, or cash back, etc. Just don’t choose a card with an annual fee- not worth it!

What other tips would you add about credit cards?

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