When I got my first credit card roughly three years ago, I didn’t fully understand its benefits. Sure, it helps build credit, but why not just use a debit card? Why do I need a credit score?
Used responsibly, credit cards can help you:
Rent with good credit history (I thought it was strictly for homeownership)
Travel for free and get cash back by point building
Get better deals on loans
Pretty handy, if I do say so myself.
Please remember that CREDIT CARDS ARE NOT FREE MONEY. I REPEAT, NOT FREE MONEY.
If you cannot pay off the full amount every month, you are overspending. Credit card companies prey on people making minimum payments who then find themselves under a mountain of (avoidable) debt due to exorbitant interest fees.
In addition to using my credit card to pay for (almost) everything, I’ve updated all of my recurring charges to that account. I’m spending that money on necessities anyway, so why not benefit from the points? This includes phone bills, car insurance, and gas.
I’ve taken it a step further by automating the full payment from my checking account to pay off the credit card every month so I don’t have to think about avoiding unnecessary interest charges and I maintain my credit score.
I still check it frequently for fun.