Yes, you read the title right, ditch the debit card and start using your credit card.
I’m surprised by how many people give credit cards a bed reputation. They’re only as bad as the beholder, and none of us are bad right? Of course not, and if we are, well, that’s why we’re here reading this, to learn… and make money fo’ free. Here me out, you’ll like this if you’re not already putting extra cash in your pocket.
I’ve been using credit cards since I was 18, and I’ve only paid interest twice (no more then $70 total). I would’ve liked to say it was zero, but we’re only human right? No one is perfect. Here are some of the benefits as to why you should get a credit card and ditch the debit card.
- Sign-up Bonuses: A lot of credit card companies offer sign-up bonuses, just like new bank accounts. We see them all the time in our junk mail. Some are very lucrative offers such as the recent $1000 (100,000 points) sign-up bonus from the Chase Sapphire Reserve card. I’ll post these on here as soon as I find more of them, but a quick google for “credit card sign up bonus” will yield you good results. Find one that suits you.
- Rewards: Several credit card companies are offering rewards on your daily purchases. Reward percentages are anywhere from 1-10%. Last year American Express ran a sign up offer that gave customers 10% cash back every month on their cell phone provider bill for about 10 months, that included any providers such as Verizon, Sprint, T-Mobile. Those rewards add up, and this is where the gold is at.
- Perks: What if I told you that if you redeem your AAdvantage miles, you get 10% back of them back to use again. That you can get free complimentary drinks at premium lounges at airports. You are also eligible to receive $100 in credit towards your TSA Pre-check application. You are bumped up to Group One boarding every time? Let’s not forget that one time your flight got delayed because of a snow storm for over 12 hours? Don’t worry, your card gives you $500 in reimbursements through your credit card perk. Let’s see your debit card do that. Not all cards are created equal, but it’s good to have some of the perks mentioned above.
You may ask yourselves that what about the interest rate? Doesn’t that outweigh the benefits? Yes, you’re absolutely right, but only if you don’t pay off your balance every month. If you use your credit card like a debit card and are responsible, then you’re golden. You don’t have to pay any interest payments and get to keep more money in your pocket in the long run. Personally, I pay off my balance every paycheck so my balance always remains zero. If you combine the use of multiple credit cards you can give yourself a nice 1-5% raise, consistently, every year. Sounds nice doesn’t it?