Always Pay With A Credit Card
sponsored by: http://www.creditcardstrategy.com
A professional cheapskate understands that credit cards are actually discount cards. When used correctly, credit cards will help you:
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Save money with cashback, rewards, and free money
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Save money on interest with 0% APR intro rates, or extremely low permanent transfer rates
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Increase your credit score
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Provide accurate spending records for analysis
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Provide added protection on purchases (insurance, breakage, unauthorized charges)
We never, ever, pay for anything with cash, unless there is no other method of payment. The only exception to this rule is if we are able to convince the merchant to give us a cash discount of at least 2%. Otherwise, credit cards are the way to go.
Our Strategy to Save Money With Credit Cards:
- Never Pay Any Fees or Interest Charges
- Always get as much cashback, rewards, points, or free money as possible
- Using multiple credit cards will save you the most money
These seem like two simple rules, but it takes some knowledge to understand how to get the best possible savings.
Are you carrying a balance on any credit cards?
If so, you need to make sure you aren't paying any interest charges. The way to do this is to transfer your balance to a credit card with a 0% APR on balance transfers. Of course, make sure you there is no balance transfer fee.
Will you need to carry a balance on purchases in the near future?
If so, you need a card that gives you 0% on purchases. Some cards offer 0% APR on purchases and balance transfers, if needed!
Do You Use At Least One Card Like A Debit Card?
Even if you need to carry balances on some credit cards (with 0% APR!), you should also have at least one credit card that you use like a debit card. Consider this card just like a cash card. Plan on paying it off in full each month.
The card should be a card that gives you cashback or rewards. By paying off in full each month, you'll avoid all fees. The cashback or rewards are your savings. You can save $100's of dollars this way. The best cards give 5% off at supermarkets, gas stations, and drugstores! 5% really adds up, especially with gas prices as high as they are today.
Do you use Your Cashback/Rewards Cards in the best possible manner?
Many people will need multiple cards to get all the best deals. Keep in mind, the cards that you use for rewards/cashback should all be used like a debit card. The idea is to save money by avoiding all fees and keeping the reward/cashback.
Best Credit Cards to Use Like an Debit Card:
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5% all gas stations
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double reward up to 10% when you choose a gift card from many of the merchant within the network instead of cash
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up to 1% on all other purchase
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gas rewards apply only to the first $1200 in gas purchases, then Discover pays the lower rate (use another card after $1200!)
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6% rebates on purchases made at supermarkets, drugstores, and gas stations for first 12 months
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Rebates can be used towards a new car or car maintenance
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Rebate can be used in the ThankYou network for gas cards
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Rebates capped at $1000 per calendar year.
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Best part of this card is the free money for driving. Citi pays $1 for every 100 miles you drive capped at $500 per year (applies towards $1000 overall cap). To prove how much you drive, you send in your service records to Citi. This is one of our favorite ways to get free money. We got $150 last year for driving 15,000 miles!
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6% cashback at all gas stations for 90 days, then 3%
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1% on all other purchases
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Best card if average (not poor) credit
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3 points per dollar at restaurants
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10,000 free ThankYou points after 1st purchase. Points can be redeemed for gift cards worth $100 (including gas cards.)
How can using multiple credit cards improve your credit score?
Many people believe that having too many credit cards hurts their credit score. This is not true.... If you use the credit cards correctly, they will help your score. If used incorrectly, they will hurt it.
Having multiple credit cards that you pay off in full each month will help demonstrate the ability to pay in time. The more accounts you pay on time, the better your score. Also, having more credit available to you overall will decrease your debt to available credit ratio. A smaller ratio looks good to the credit scoring companies.
Some people have written to us that they have a lower score because they are carrying "too many revolving accounts". The report may show that, but if you pay off in full each month, the credit cards are HELPING your score more than they are hurting it. The agencies need a reason not to give you a perfect score. We explain more on the credit score section...
Check out our credit score section for more detail and to get a free score.
Did you know you can have multiple credit cards from the same bank?
We carry almost ALL of the credit cards we discuss throughout the site. We currently have 7 different cards from Citi. There is no rule against having more than 1 card from the same bank.
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