Credit Cards aren’t evil…..

A lot of people think, Credit cards are evil… how can such a little tiny piece of plastic, that doesn’t even have a brainpower to be evil? Do they come out and tell you “hihihihi I’m going to get you in trouble?

I don’t think credit cards are evil at all, they are all BUT evil nowadays, the person who is using the credit card is the one in charge and you have to have self control to use them. Credit cards nowadays are a wonderful tool in helping you save money; there I said it. They help you save money.

Now you asked, how can a credit card help ME save money? It’s simple and I will explain and hope you will change your thinking on “evil” credit cards. I used to be in very bad credit card debt back in the day; yes I had well over $20,000 in credit cards; and honestly I was excited when I got a credit card on my own, no co-signer for $4000, yet I didn’t even have a job at the time. Whohoo… I thought jackpot!!! Let’s go shopping; I knew I had to pay it back, BUT small payments each month we can afford that… so no problem.

Well, my husband thought the same way and after a few short years we had I think 5-8 cards and well over $20,000 just in credit card debt. But what did we have to show for that kind of money?? Nothing, not a thing actually.

About 4 years ago I started couponing and my entire outlook changed, I looked at money like it was gonna go away; I horded all the money I could and saved as much as I could, I was afraid I would run out of money… Insane, yes.. BUT that outlook changed my/ our entire life.

Thanks to couponing and saving money like crazy, I was able to pay off our entire $20,000 credit card debt in less than 2 years. Amazing isn’t it? I did not have any help, or didn’t even know at the time that Dave Ramsey even excited. However I used the same ideas that Dave Ramsey has, looking at his ideas now is like “OMG.. that’s  my Idea…”…lol.. You pay off the smallest and work your way up. We managed to do that fairly quickly and soon we were debt FREE, besides the House and the cars.

That was exciting and a HUGE relive off our back; but now you would think. Don’t ever touch a credit card again… WRONG!!!! I don’t care what the interest rate is on credit cards nor their late fees or penalties; I couldn’t tell you any of my cards interest rate. BUT we are using our credit cards for our benefit now;

I closed all the cards that we had back in the day while paying them off and we cut them all up at that time. Once we were all debt FREE and our
mind was set on saving as much money as possible we opened up an Amazon.com credit card ( no I’m not trying to make a commercial for Amazon in this post nor was I paid for it).

We use this credit card for EVERY purchase that we have to have, no I’m not meaning the Starbucks coffee down the street or the Lunch At Pizza Hut, no our monthly expenses all got charged to the card. We had a strict budget and still have each month and nothing else is charged. We have a rule in our house that whatever we charge that month HAS to be paid off, no matter how; so we never spend more than what we have.

We treat our credit card just like cash and balance it in our checkbook just like it was our checking account. I pay the cards in full each week and never owe a diem in interest. The nice thing, the credit card gets me reward points, each month I make about $25+ in cash as reward for using the card. I choose to cash out for amazon.com gift cards and that is going towards Christmas for the kids.

If you add it up that is $300 in Amazon money ( you can also cash out for actual Cash if you like) each year. My credit card is paying ME $300 a year to pay MY bills. I pay my card in full each month, therefore I don’t ever have a late fee or any penny in interest at all.

Now you tell me, is my credit card evil? All you do is charge your monthly expenses like phone bill, insurance, TV, groceries, medication; things you have to pay for each month out of your paycheck anyways and they pay you back in rewards. DO NOT!!! Use the card for extra things unless you have that in your budget in your savings account. Look at the credit card as if it was your savings account; check your balance daily, keep an eye on what you spend.

People say you will spend 25-50% more if you are using your credit card, I beg you differ in my home, we are very strict on what we charge and whatever it is we have to have the money to cover it at the end of the month.. no excuse…

We since, have added a few credit cards, for the sole purpose of getting the rewards. Like I have a trip planned to visit my best friend in Alabama the end of May, the hotel was $160 a night, I was able through online research find discounts for the room to be $100 night, but if I open a credit card I would save another $50 making the room( it is actually a small apartment) less than $70 a night. The card was free, and will be paid off and closed out in a few weeks; will never be used again and we got our discount for that particular item.

Now you ask, how will all that affect your credit? Ours has been amazing; with us using the credit card as our “checking account” we have an excellent credit history showing that we are paying on time and paying all our purchases off. I cannot believe the world of difference this has made.

We are now able to get the best car loans, home loans anything we need when you need to have it; all because we use our credit cards wisely. Don’t worry about the interest on the cards, APR or anything PAY IT OFF each month and you don’t have to pay anything; just make sure that your card has no yearly FEE.. if it does, look for something else!!

What card is best for you? Everyone is different and everyone has different needs, for us Amazon.com credit works well since they have everything at the lowest price and $300+ extra towards the Christmas fund will allow us to buy the kids what they actually want; others like to have gas rewards or travel rewards. Look into your situation and then decide what kind of reward you would like. There are a lot of them out there you just have to do your homework and be very strict on yourself and don’t look at it as “FREE” money, look at it as “Your checking account”.

If your change your mind about the rewards you are getting, look around for something else; I did that a few years ago when I started with that theory, I wanted to buy FREE cloth for the toddler at Gymboree, I opened a Gymboree account to get all the rewards for a Gymboree card, we used the gift cards towards my Toddlers cloth purchase when the cloth were on sale and rock bottom prize; we were able with rewards alone purchase her wardrobe each year and even then some, after having 4 years + of brand new wardrobe for the toddler, we decided we no longer want the Gymboree rewards and moved to the Amazon.com card, which now suits us better since we do have the option to cash out for CASH if we wanted; It really is a nice thing BUT make sure you have your mind set on being strict and frugal….. don’t spend just to get the reward.. unless you can afford to pay if of, if you don’t pay it off every month then the rewards are nothing good at all, because you are paying more in interest then what they reward you……

Also in our house we only keep one main credit card, if we open any for special discounts like the travelers card I mentioned, they will be closed within a few weeks after they are opened ( you do have to make sure there is no fine print to keep the card open for 6 month or so, some may make you pay back the reward… then I wait and close it at the earliest time, however we do not use that card again….!!!!)

Happy Shopping…….and Happy Savings….

P.s. this was just our two cents, things may work different in your household or for your purpose, for us it works well for the moment… and no I was not asked to write this post, I just wanted to give some ideas about how to use your credit cards wisely J