I’m not sure if I have a problem, but I am always curious to see what type of credit card people use when checking out. I certainly see a wide variety, but inevitably I see a lot of non-rewards type credit cards and debit cards.
Now don’t get me wrong, I am sure I’ve misidentified plenty and also know there are debit cards that offer some sort of cashback. And I will admit, this definitely wasn’t any kind of a scientific experiment, but I feel like I’ve been doing this for quite a while (hopefully, this doesn’t put me in creepy status).
As long as you don’t have a history of not being able to control your spending habits or have bad credit, I don’t see any reason why you wouldn’t use a rewards credit card for every purchase possible as long as you pay off the balance every month.
Maybe I’m just off in my own little financial planner world, but these things can add up to a lot of rewards over time. I’m not sure if it comes down to skepticism, laziness or just not understanding the benefits, but people are missing out on some great perks.
To totally interrupt this story and because I feel this is extremely important to address, do not use a credit card if you cannot pay it off every month. Stick to cash or your debit card.
Yet, if you can pay your credit card bill every month, then give it some thought and take me up on the challenge. Let’s just look at a quick example. If you were to average $3,000 a month in spending and earned 2% cash back on your credit card that would equate to $720 a year!
That’s right, $720 a year in cash money for just using a credit card on purchases you were already going to make. Plus, when it comes to this time of year with holiday purchases, it could add up to even more.
To go along with that same sentiment, $720 could go a long way for purchasing gifts as well. So now that you know there are real rewards to be earned, you’re probably asking yourself “What type of card is best for me?”
Well, there are many sites that have already done the hard work for you. What I use personally and recommend to all my clients is the Citi Double Cash Back card. It’s simple and straightforward. You receive 1% cashback on all purchases and 1% cashback on all payments, which equals 2% on everything (FYI, Citi does not pay me to promote their card).
However, there are plenty of other cards out there if cash back isn’t your thing or you’re looking to earn extra cash back in certain categories. A site that does a wonderful job of rating cards is Nerd Wallet. They do a great job of categorizing the cards by best offers, cash back, travel, rewards, business, etc.
I will also mention that Target has a great card which provides a 5% rebate on all purchases at Target. So, if you shop at Target, why not take advantage of 5% off of every purchase for the rest of your life. If you spent $1,000 a year there, that’s fifty bucks. If you saw 50 bucks in a field, I’m sure you would pick it up. Well, this isn’t much different.
Let me step off my soapbox and put a bow on this blog post. If you are already a disciplined spender, then rewards cards just make sense. You are exactly the person who should be using these types of credit cards.
Check out the sites above and take a chance. It will only take a few minutes to fill out an app and you’ll be earning rewards in no time. Step into the realm of a savvy spender and see how it feels. I know you’ll be thankful when it comes to buying gifts this time next year.
*I can’t reiterate this enough, but if you do not have the discipline to have a credit card then don’t get one!