It’s still Financial Literacy Month and I’m going off the beaten path this week as I need to rebuild my content for this and next week. At one point I was a few posts ahead but alas…I got behind. Anywho! As you all know, I like use credit cards to earn cash back. Sounds great right? In today’s post I’ll be sharing 5 reasons to use a credit card on a debt free journey. So grab that snack and something to drink, (this one we’ll want to be nice and sober) and we’ll get started!
Disclaimer: This is not official financial advice, just some hints and tips of the things that have worked for me over the years. This is not intended to recommend or suggest any products or services mentioned.
Now that I’ve done my dirty work, I can tell you that I have had excellent luck using credit cards while working on paying debt down. So let’s talk about what you came here for!
1. There are a lot of great credit cards that offer cash back.
I have gained hundreds possibly even thousands of dollars in cash back rewards and statement credits for the credit cards I use. Very recently, I began cashing in the rewards and putting them in my account since my primary credit card Citi Card Double Cash only pays rewards after the statement closes. The Capital One Quicksilver pays rewards within a business day of the transaction posting to the card. With this in mind, you can apply these extra funds to your debt to help keep up the momentum. I throw mine to savings since I’m paying down debt aggressively.
I prefer not to use my credit cards that don’t offer cash back. It’s major case of FOMO (fear of missing out) for me. Try to get a credit card that offers 1.5% as a minimum for cash back.
2. You can take a little longer to pay off the balance.
Unlike a debit card purchases that are drawn from your account within 3 business days, you have a little extra time with paying off the balance for your credit card and you get to take advantage of the funds in your account if it’s an interest bearing checking like mine is.
3. You have time before interest is charged.
This point goes along with the second. While I like to keep my credit cards at a $0 balance by time the statement closes because I pay as I go, you can also let the balance roll into the next statement. As long as the payment is paid in full by the next due date, interest will not be charged. This allows you to float the payment if needed, but I highly discourage that if this is something you struggled with in the past.
4. Credit card usage helps maintain a good to excellent credit score.
Credit cards are excellent vehicles when it’s comes to establishing and maintaining credit. The key is to keep that balance below 10% of the credit limit for the highest credit rating. This is going to help with your future purchases of a home for yourself/family and any investment properties. Good credit is integral to having deep pockets…just saying.
5. Credit cards can cover an expense that costs more.
Yes, it’s crazy important to have an emergency fund. By this point, you should hopefully have a few thousand dollars in cash. This can allow you to use your credit card, collect the rewards, pocket the cash/apply it to your statement balance, and payoff the credit card using your emergency fund. This even allows you to save more cash if you need a little extra time. I don’t know about you all, but it hurts my feelings to draw money from my emergency fund. I worked so hard to gather the little cash I have and I sometimes just want to keep it. Especially with me not throwing much towards savings.
We got the fun stuff out of the way. Now, I want to make some thing very clear. I was a chronic card swiper. That was whether I needed to swipe or not. I definitely belonged on an episode of Dora the Explorer just so I could hear her say “Swiper no SWIPING!”. It was a mess. Before you consider using your credit card, do the following:
- Make sure you have a good clean slate with the card you’re going to be using and payoff the balance before you are charged interest. Paying interest completely defeats the purpose of obtaining cash back, with the interest rate being more than likely 25+ times the cash back you’re getting.
- Even if you can pay the balance down, stay within your budget to keep yourself accountable and avoid overspending.
- Keep the number of cards you use low. I mean a maximum of 1. The reason for this is you may forget about a payment and you’re better than that.
- Be very careful with carrying a balance past the statement date. This can increase your utilization and cause your credit score to decrease, albeit temporarily but it does happen.
All of this, is coming from someone who had $16k in credit card debt scattered across 8 cards, when they first started their debt free journey. I had to repair my relationship with money first. There is hope for you! I cleaned up my act and I haven’t paid interest for a credit card since 2021.
So that’s all I’ve got for now! I hope this helps you to start gaining the rewards you deserve!
Pro-Makeup Artist/Licensed Esthetician Tip
When you’re picking any of your skin care products, be sure to pick something that caters to your skin type. Oily skin and dry skin typically should be treated differently unless you have oily skin that’s dehydrated from lack of moisture. Men, always be sure to cleanse your facial hair thoroughly down to your skin. Also, to confirm how the skin on your face will react to the products you choose to care for your facial hair, a patch test is suggested.
Tingling, itching, stinging, burning, redness, bumps, and other breakouts may mean a product is not suitable for your skin and use should be discontinued immediately
Until Next Time!
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