I was having a conversation with my sister the other day about credit cards verses cash. She prefers cash (or debit cards) because she stays honest.
I, on the other hand, love credit cards. In fact, I was churning through them last year to get the maximum rewards, but have had to put the kibosh on that because of the whole getting a mortgage thing.
And now, the mortgage is going to be sold a number of times. Everyone thinks Wells Fargo will end up with it.
Why does it feel like cash gets spent so quickly?
My dad recently gave me $40 for spending money. And, holy cow, that never gets old. Never, ever. But where did it go? I have absolutely no idea, but … it’s gone.
The only way to use credit cards
Here’s the thing. All the perks and incentives in the world won’t help you if you end up increasing your debt load. Use credit cards responsibly.
- When you sign up for a credit card, immediately sign up for their online bill pay
- Set your billing to “auto pay the full balance every month”
- Don’t spend more than that
- Track your stuff in Mint and call the credit card companies after they charge you an annual fee
- If they won’t waive it, cancel the card
- Rinse, repeat
There was one card that charged me a $95 annual fee. I called, and tried to get them to get that off. I was unsuccessful. I said, “I’m simply not going to pay $100 a year for a card that most small businesses won’t take.” She said, “well you know, you can call this number every time a small business won’t take our card and then maybe they’ll sign up for it.”
I told her that I work in sales during my day job, and absolutely do not want to work in sales, for free, for a card that really only helps me at the airport and at Costco.
So, use credit! But be aware, okay? Don’t pay interest, and don’t pay an annual fee.