Using Credit Wisely

As the New Year starts, many people are setting goals, and some of those goals are financial.  While I am not a financial adviser, I want to share some of the things that have worked for me and my family.

I am getting a very tired of hearing about how horrible it is to use credit cards.  I don't know how many times I've read that if you want to live debt-free you should get rid of your credit cards.  Here is my unsolicited opinion....use credit wisely.  Yes, we use our credit cards and get bills in the mail each month, BUT we pay those bills off in full each month.  We use our cards to their fullest advantage.  Each of the cards we use has some type of reward associated with it.

Years ago, I had a Barnes and Noble credit card.  I earned certificates to get free merchandise at the bookstore.  Given how much I love to read, this was right up my alley.  Well, they decided to discontinue the program.  I stumbled onto Chase and their Amazon.com Rewards credit card.  At the time, I knew Amazon sold books, so that was a good incentive for me to apply.  Since then I have acquired hundreds of dollars of merchandise from Amazon at no out of pocket expense.  I use this card for almost everything.  The catch is, I pay off the entire balance each and every month.  Yes, the credit card companies probably hate me because they are paying out roughly $20 in reward money each month and they are not getting any interest out of me, but I don't care.

A few months ago, I shopped for my daughter's birthday gift.  I found the bike on Amazon for $80.  I checked again, the price and it was $65 (+ shipping).  I checked my credit card rewards and I had $20+ in Amazon reward points available, plus $5 in a gift certificate.  By the time I was done, I bought a bike for my daughter that could have cost us $80, but instead it was only $45 out of pocket.

Our Fry's (Kroger) stores have advertised their branded credit cards for awhile.  I gave it a lot of thought before deciding to apply.  Since I shop at Fry's weekly, and I can get additional grocery and fuel savings, I decided to go for it.  I only use this card for my trips to Fry's and the fuel center, but the points add up.  When I reach a certain number of points, they send me a $5 check to use in store toward purchases.  Why would I turn down free groceries?  Like the Amazon card, I pay off the balance each month.

Target is another place I find myself each week.  I was reluctant to get a Red Card because it would mean I would earn fewer Amazon reward points.  However, doing the math, the additional 5% off each purchase made with the Red Card is more beneficial.

I've heard people brag about not owing anyone because they don't have a single credit card in their name.  That is wonderful.  I certainly don't suggest taking on mountains of debt.  These same people then complain because when they do need credit (for a car loan or home loan) they have trouble because they don't have a strong credit score.

My suggestion is live within your means. Only purchase things you can afford. Find a credit card with a reward that will benefit you. You don't need to get rid of all of your credit cards, you just have to learn to use them wisely!