Are you getting the most out of your credit card?
When used responsibly, credit cards allow you to earn cash or other rewards for the things you buy every day. Plus, they can be valuable budgeting tools that let you easily see where your money goes each month and make any necessary adjustments. That’s why some people use their credit cards for all transactions.
Ready to do the same? We asked three people — Laureen D., Nate B., and Jessica L. — who use their credit cards for everything to explain why it works for them.
Here’s what they had to say:
How would you describe your credit card habits?
Laureen D.: I put everything on the card. I would say I’m a “power user.” It’s interesting, I completely shifted my behavior about eight years ago when someone asked me, “Why wouldn’t you use your credit card for everything? It’s free money for cash back.” And I realized, “Oh, you’re right.” So, I literally put everything, whether it’s big or small, on the card, specifically to get the rewards.
Nate B.: Same for me. We’ve got our cable bill on there, our phone/internet bill on there, the propane bill for the house — any kind of recurring monthly payment that I have, I try to put those on the card to get the rewards on those transactions as well.
Jessica L.: I charge as much as I can so I can get as much back as I can. I pay as I go vs. when the bill comes in at the end.
15% ARP, 1.5% cash back monthly payment: $1,000 pay-off time: 1 month interest charged: $0 cash back earned: $15 swipe savings: $15 $1,000 balance 15% ARP, 15% cash back monthly payment: $100 pay-off time: 11 months interest charged: $75 cash back earned: $15 swipe savings: negative $60"
Keep your credit utilization low.Resist the temptation to spend more than you normally would just to earn bonus points. Overusing your card can spiral out of control quickly and put you into serious debt. Additionally, using more than 30% of your available credit can bringyour credit score down. So try not to overdo it.
