frugal friday: credit cards-the good and the bad

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are credit cards evil? because they certainly haven’t been evil to us. i know the reasons why they can be evil but overall, i think credit cards fall under the same concept-the love of money is evil. if you love money, it will be lord of your life, that is certain. and you can’t trust yourself with something that technically allows you to spend money you don’t have, i have one piece of advice for you: don’t get a credit card.

BUT, here’s what we’ve found about credit cards: they are manageable AND they can reap reward. here’s a little summary of my history with credit cards.

i got a credit card right when i turn 18, three years ago. i had a fulltime job and made way more money then i needed as a single lady living in cheap housing. i didn’t get a credit card because i thought i needed it. and i didn’t get a credit card so that i could buy things that i wanted.
i had heard of the sharky world of creditors and of people being swallowed whole by credit card companies because they owed so much. i had heard of that fateful credit report that made you or broke you. i had heard how little it takes to ruin your credit and how long it takes to rebuild it. i had also heard of all the young people who had no credit. and well, i wanted to start right. i wanted good credit.

so in my three years of credit card history:

  • i’ve never carried a balance
  • i’ve had one late payment
  • i’ve made close to $250 bucks
  • i have excellent credit

my experience with credit cards is that they can make you money. we have a credit card from chase bank that give us 5% rewards on all the gas we purchase at bp, 2% rewards on travel & dining and 1% on everything else.

we fill up at char’s, a bp station that i like to give my patronage to anyway and we spend about $150 a month on gas. that is $7.50 of FREE money each month-or $90 a year. um, i’ll take it!

we also buy our plane tickets on this card. we’ll probably fly at least once a year as bryan’s family lives on the coasts. we just bought tickets to california for $500 and got $10 bucks for it.

that’s already $100 bucks a year that we’re making because we’re spending on things we need and have budgeted already. other then those two major budgeted items, we also use the card for major purchases that we’ve saved for. for instance, bryan is going to the eye doctor next week. instead of taking the cash we saved, or writing a check, we’re going to use our card and get the 1% reward for it. might as well, right?

seriously, sometimes i secretly wonder if chase is kicking themselves in the pants because they’ve given me around $200 bucks and have not been able to charge me interest. but then i think about all of the people that are spending more then they have and are being charged 18% interest and i am reminded of why they can shell out these sweet rewards.

i guess this weeks frugal friday tip is to take advantage of FREE things, but be careful with those that are offering it. if we would have been unwise with our credit card, that $200 in rewards would have been lost a long time ago.

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One thought on “frugal friday: credit cards-the good and the bad

  1. I agree with you completely! Dave and I have never carried a balance either – and not because we're just rolling in cash or anything. We just never, ever spend more on it than we can pay.
    We get to choose when to cash in our rewards, and after having saved up for a long time, we got over $900 in cash back to help pay for our Australia trip! But, for what it's worth, they still make money, even on customers like us, because of the charges that vendors pay for their services. So, even though you made $10 on your airline tickets, the credit card probably charged the airline at least that much, likely more. Anyway, I'm a big fan of credit cards used wisely – good post!

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