Credit cards have changed a lot in the last 30 years. It used to be that credit cards were only really utilized for large-ticket items with the intention of paying them off over time. Now, thanks in large part to the onset of attractive rewards programs, making everyday purchases on credit cards can make a lot more sense. While you don’t want to start spending money that you don’t have, getting strategic with your purchases as well as choosing a credit card that makes sense for your lifestyle can actually be rather financially lucrative. As with nearly all things finance-related, some due diligence and fiscal boundaries can help ensure you’re getting the most out of your credit card spending and rewards.
Peace of financial mind
One of the main benefits of using a credit card for more of your everyday purchases is the security that comes along with it. In the unlikely event that your wallet is ever lost or stolen, it’s an easy call to the card company to put a hold on your plastic. In the worst-case scenario that someone is actually able to use your card to make purchases, you don’t have to worry about waiting for your hard-earned cash to be reimbursed. A stolen debit card or checkbook would be using cash straight from your bank account. While your bank will always reimburse you for unauthorized purchases, the process can take a minute leaving you with a cash loss you’ll have to navigate in the interim.
Points for the win
We’ve mentioned this already, but taking full advantage of the rewards available with your credit card can be a massive benefit if you plan accordingly. Credit cards can feel a bit scary at times due to high interest rates and the threat of carrying too much debt. However, if you treat your credit card like a debit card and only spend within your limits with the cash you know you have on hand, you won’t need to worry about balances getting out of control. First, figure out which regular purchases you make that potentially qualify for rewards bonuses for your particular card. Then, start to break out that plastic and start earning those rewards! It’s important to make sure you’re keeping a close eye on spending so you don’t venture outside your means, but with some strategic swiping you can start to see big benefits. Of course, we’d be fools not to mention that we’re introducing the first health & wellness credit card very soon so be sure you head over to our waitlist and sign up if you haven’t already!
Build that credit score
This one might seem like a no-brainer but the more you use and pay off your credit card, the more you can help increase your credit score. We’ve talked about the importance of a high credit score in the past. Taking advantage of your credit card spending can have the added benefit of also scoring you some potential rewards while building up your score. A higher credit score will make a whole host of future financial issues much easier to navigate from buying a home to getting a car loan to even qualifying for an apartment, so any way to elevate your numbers will pay dividends in the end.
When used wisely, credit cards can play an important role in your overall financial wellness. It’s important to remember that it can be tempting to start racking up lots of charges on a card when you start to use it more. Be sure to factor credit card spending into your monthly budget and always try to pay off your monthly balance in full to avoid incurring any penalizing interest rates. As always, a little planning now can go a long way towards paying yourself back in the future.