Credit cards… To use or not to use?

So this post is going to be a bit more dry than my usual posts…  I therefore feel as though I should start with a light-hearted joke or something.  The only problem is that I don’t know any good ones.  And my cats are cranky this morning so there are no cute, fuzzy kitty pictures to be taken.  (Unless you all want to see a pic of Highstreet — my large black cat — in all his grumpy morning glory).

But I wanted to quickly clarify one thing from my last post… (And turning a post about money, credit cards, and budgeting into a humorous blog post is beyond my levels of talent).  So here goes nothing…  😉

Nate and I do use a credit card.  I received an email from a reader who wondered how in the world we carry just the right amount of cash with us everywhere, if we’re not using credit cards to pay for things.  🙂

So here’s the truth… We actually put everything on our credit card, from the living room furniture to the groceries we pick up every week.  What we don’t do is ever pay interest.

Nate and I have a very detailed budget in which we break down our monthly bills, savings, and then our extra cash.  We always know exactly how much we have to spend each month and we keep track of that very carefully.  So while we put everything on our credit card, we pay it all off at the end of the month.

The reason we do this, as apposed to using a debit card, is that credit cards offer points.  Nate and I have been gaining travel points for the past couple of years, and we plan on cashing them in this year.  This means that we’ll be going on a nice vacation that is almost paid for in full.

So it’s almost like a free vacation!!  🙂

This kind of spending isn’t for everyone though. Credit cards can be dangerously tempting and if you aren’t sure that you would be able to follow your budget, then stay away from cards.  Don’t play with fire and you won’t get burned, right?

The bottom line is to try to not spend money that you don’t have.  Getting into debt is a huge burden and often causes issues that reach even beyond finances.  So while living by a budget can be frustrating at times, it is SO worth it!!

How do you feel about credit cards?

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14 Responses to Credit cards… To use or not to use?

  1. Sarah says:

    I couldn’t agree with you more. Paying off the credit bills every month is CRUCIAL. Interest rates can be totally ridiculous.

  2. theclambroll says:

    We do the same thing as you! We rack up points all year, and then cash them out for gift cards at Christmas. I don’t think we’ve actually “paid” for our family/friend’s Christmas gifts for about 4 years. 🙂 And Capital One hates us because we’ve never paid a cent in interest.

  3. sarahnsh says:

    I should get a credit card to gain points but I don’t own one at all and only own my debit card. Something about credit cards makes me a little scared so I resist them. I know from having a Victoria Secret credit card that when I have to send in the statement by mail I can get a little lazy about sending them and that’s not good.

  4. I completely agree with you. I don’t understand why anyone would pay for things with their credit card if they’re not going to pay off the balance. Bottom line: don’t by shit you can’t afford.

    Another bonus of paying with credit card (or debit too, I suppose) is that you have a record of every purchase you made that you can keep in case you get audited. That way you don’t have to keep all your store receipts for years and years.

  5. When I got married, I married into my husband’s credit card debt. We pretty quickly jumped onto the Dave Ramsey bandwagon and I peer pressured hubby into cutting up all our credit cards. I know lots of people (like yourself) who are able to just pay them off each month and use them for awesome things like airmiles, but for us it’s simpler not to have them at all.

    • Nicole says:

      That’s awesome that you are making that stand and that you cut up the credit cards!! I’m sure your hubby is SO thankful that you stood firm on that!

  6. Haha, that’s exactly how we deal with credit cards (see comment on previous post). And yea, we LOVE the benefits of cash rewards. We use them for vacations too!

  7. Lois says:

    We used to do like you guys, but ran into some emergencies that put us behind, and the extra ended up on credit cards. So for now we’re doing the Dave Ramsey cash budget thing and rarely touch our credit cards. When we do, we immediately put the cash into the “pay back to Mastercard” envelope. Someday, I look forward to going back to our credit cards and using them carefully, because man, the rewards are sweet!

  8. livvy30 says:

    I think the credit card system in North America is great. Here it’s expensive to have a credit card! There’s a charge for each transaction and taxes/government levy for just having one. I only have one for booking things online like flights or other tickets. Besides that I ALWAYS use cash, even when travelling. I also pay it off the same way as you, so there’s no interest to deal with!

  9. Patty says:

    I’m wary… there are just certain places you shouldn’t use credit cards, like out at the bar. But I do like to use it for managed purchases. The rewards are just too good not to use it.

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