When most people think about credit cards, it usually comes with a negative connotation. Well I'm here to tell you that credit cards don't have to be all bad.
First of all, I always pay off my entire balance every month. This alone keeps me from paying any fees. Some people will argue that you still spend more because it's easier to swipe a card than to use cash. I agree with this to a point but you just have to have some self control.
Here are the cards I own and neither have an annual fee:
Chase Freedom Visa
* No annual fee
* 5% cash back at rotating categories quarterly up to $1500
* 1% cash back on anything else
American Express Blue Cash
* No annual fee
* 3% cash back at supermarkets up to $6,000 per year
* 2% at US gas stations and select department stores
* 1% cash back on anything else
I use my Chase Visa on the rotating categories and I use my Amex card on everything else. My wife also using the Amex account for all gas and groceries.
All balances are paid at the end of the month to avoid any fees. Actually Amex is set up to automatically pay the full balance at the end of each month. I don't even have to worry about it.
In additional to these benefits, these cards offer new users a bonus when they sign up. I think it's $100 currently with Chase and it was $150 when I signed up for Amex.
The biggest problem with Amex is that it's not always accepted everywhere. That's ok because it's always accepted when I use it for gas or groceries though. I don't like having to keep up with the rotating Visa categories and would look into a new card if it had better benefits.
I'm curious if anything else uses credit cards to their advantage and what they are using.
Great point. I just started recently using my credit card to my advantaged.
ReplyDeleteGood for you. As long as you're watch your spending and budget for the bill at the end of the month then you will come out ahead.
DeleteTake care!
I enjoy using my Capital One Venture Card. I currently use the card with $0 annual fee, that provides 1.25% cash back on all purchases. The redemption is fantastic for travel at 100 points= $1. The points can be used for previous travel (last 90 days ) and future travel purchases. There is an option to pay a $59 annual fee and get 2% cash back. I have done the math and this is probably a better option for me considering I try to place all my expenses on the card and pay off monthly. But, I haven't got around to making the switch. Great article topic! I'm always interested to hear great ideas to save/make money.
ReplyDeleteHi PFF,
DeleteI'm glad you are taking advantage of the cash back. My other rewards/gift card options aren't better than getting cash. Plus I can use cash to buy whatever I want so I'm not limited to a gift card. I'm not a fan of annual fees but like you mention, it could be worth the extra fee if you are spending enough. I'm really looking for a card that gives 2% or better on all other categories.
Thanks for stopping by.
There is a Fidelity Investments AMEX card which offers a flat 2% back on everything. Simplicity is beautiful.
ReplyDeleteHi Executioner,
DeleteThat sounds like a card worth looking into. However, I'd prefer to only have two cards and not three. If I get rid of an Amex I could get another Amex but I don't want to end up with two Amex or two Visa cards. Thanks for pointing that one out.
Cheers
How much monthly do you usually spend on Amex and the other card? I let myself slip thru and then had balances quite high on Amex and my monthly pay off balances were at 900 - 1200 dollars a month, with the other cards I have it was a devastating debt and now I struggle to get rid of it (but successfully going thru it), so i wonder what is your monthly spending habit via the cards.
ReplyDeleteI have a plan to have enough savings aside as a back up for monthly payments (the rule of spending the next month paycheck) to have cash to pay the card off every month, but I must progress to it first.
Hi Martin,
DeleteIt depends on the month. For instance I'm going on a trip to Seattle this week and have budgeted accordingly. Of course I booked everything on my credit card to get the cash back. I'll then use the budgeted money to pay off the card at the end of the month. That's why budgeting is so important. You have to make sure you have enough money to pay off the card at the end of each month otherwise the card probably isn't beneficial.
Thanks for dropping by!
We agree with you completely that responsible credit card use can save you money AND build credit. We have even written articles on all the bonus cards we have used which can be recycled and one time only bonus cards. How to use business rewards cards and more.
ReplyDeleteI'm glad others in the finance world agree with our view. Many people lump credit cards in black or white not spending time to address the user instead of the card!
Hi Wallet,
DeleteI'll have to check out your articles on your bonus cards. You also make a good point about building your credit. If you ever want to buy a house it's very important to build up your credit score and you usually need a few trade lines.
Take care!
Have you checked out US Bank's Cash+ Visa?
ReplyDeleteIt's not as good of a card as it used to be, but you can still get 5% on up to 2k of purchases per quarter on 2 categories you choose from a list.
You can also earn unlimited cash back 2% on either groceries, gas, or pharmacy.
Everything else is 1% cash back.
If you don't select your quarterly categories everything defaults to 1%, but you can get text and email reminders to select your categories.
What I really like is that you can get 5% cash back on charitable contributions made via the credit card.
And once per year if you redeem $100 or more at a time you can get a $25 visa gift card with that redemption.
Don't need to be a US Bank banking customer to apply for the card.
I have had the card since middle of last year and am not affiliated with US Bank.
Hi anonymous,
DeleteNo, I haven't checked out that card before. I already get 3% at supermarkets, 2% on gas and 1% on everything else. This card would only benefit me in the rotating categories. The 25% bonus cash is big also though. It is certainly worth checking out. Thanks for stopping by and mentioning it.
Take care!
Currently I don't have a credit card. I typically pay cash or sometimes use my debit card for things online. This is all designed to keep me from being an idiot and to build my wealth.
ReplyDeleteI've basically paid cash for everything my entire life and never had debt. Not on a car, not for school, not on a house, not on a credit card. None. Ever.
I think I might be leaving some money on the table and might apply for the Fidelity American Express card, but only if I can do automatic payments.
That's great that you have always paid cash. You have probably learned a lot of good habits then. Yeah, my AMEX autopays the entire balance each month. I might recommend just using it for groceries or gas and see if you like it and have the self control. The cash back does start to add up though and is a nice bonus.
DeleteThanks for stopping by to comment!
Hey AAI,
ReplyDeleteSelf discipline and control is ultimately the make or break for this. If you're a spendy or your partner is a spendy then credit cards are probably not for you. In Australia we don't have zero fee rewards cards but I use a zero fee card for all purchases and have my savings sitting in a 4.5% high interest account earning me money whilst I use the banks for 60 days for free. I would have to spend 3-4 times the amount I do to be even close to recovering the fees on most rewards cards here in the Australia.
KM