Now before you go all “Dave Ramsey says..” on me this post isn’t about getting into credit card debt or even spending without a plan. It’s about what you can gain using a credit card, if you use it with strategy.
Traditionally using a credit card is a bad idea. We all know how detrimental credit card debt can be. I certainly do. I carried credit card debt back in the day before I got smart. Sadly according to the latest research credit card debt is skyrocketing again and half of American’s feel insecure about their financial situation.
If you can’t stick to a very strict plan using a credit card this post is not for you. You need to read my book How To Get Out of Debt Living Paycheck to Paycheck and take my Financial Freedom course.
Now that said, if you can use a “no annual fee with rewards credit card” in a smart way read on. And note this only applies to a no annual fee rewards card that you either get cash back on or that provide points for something you use anyway, like travel points. Not just a standard credit card with no perks.
3 Reasons to Use a No-Fee Rewards Credit Card
1. You travel for work and your employer reimburse you. Or if you regularly get reimbursed for other purchases. This is a great way to either make cash back or get travel points without spending your own money!
It’s especially great if you use a credit card with an airline carrier and your employer lets you keep the mileage points. That way you earn points both for flying and for the ticket price. And, don’t forget the hotel and rental car points as well. If you travel a lot you can fly on vacation for free or for a lower cost courtesy your employer’s money.
If you struggle with credit card debt you may be too tempted to use your card for personal use. If that is the case this is going to cost you more than it’s worth. Don’t play with fire!
2. You strategically use your credit card for things you would use your debit card or cash for like gasoline, groceries and utilities. This one requires discipline. Let’s say your food budget is $100 per week. Go to the store, swipe your card, immediately get on the computer and make a $100 payment on that credit card from your checking account.
You get cash back or travel points but you use your credit card temporarily before using your cash.
3. No matter how much I tried to come up with a third reason I couldn’t. This is where you come in. I would love to hear how you strategically use a no-fee rewards card without going into debt.
Leave a comment below and let’s learn from each other (any rude, snarky comments will be deleted).