Wednesday, October 13, 2010

How Credit Cards Save My Family Money

Okay, I know that this topic is really controversial in the money-saving blog world, but I had to share this because using credit cards really does work for my family in our current season of life.  I know that some people are going to just see the title of this post and get ticked off, but please hear me out before you leave comments!  I TOTALLY understand why so many people are against using credit cards, I know the reasons and I am behind you 100% if you do not use credit cards.  However, right now credit cards work for my family.  I decided to do this post as a Works-For-Me-Wednesday instead of a Money-Saving-Monday, because I believe that credit cards are not for everyone.  If you know that you have trouble with credit cards-then by all means cut them into pieces right now and throw them in the trash!  Please do not think that I am endoring credit cards in any way, or trying to say that other people should use them.  I just want to share what works for my family.  Here is how credit cards save my family 100's if not 1000's of dollars every year:
  • First of all, I know that it is said that for most people, using credit cards causes them to spend more because it brings them less physical "pain" than using cash would.  This is not the case for me.  I have what I think is bordering on a debt-phobia.  I have these some-what irrational fears that somehow my husband and I will get into debt and it will totally control the direction of the rest of our lives.  I start to feel anxious when we charge large amounts of money on our credit cards.  
  • Another way that using credit cards saves/makes my family money is the rewards that they offer.  
    • Occasionally, we get a credit card offer for $50-$100 cash back when you make your first charge with it.  Several times I have signed up for these, made a charge, paid it off and cut up the card.  Then we get a free $50-$100 check in the mail when we redeem the reward.
    • I also have one credit card that I use all the time that gives me 1-3% cash back for every purchase that I make.  Over the last year and a half that I have been using this card, I have gotten around $400 cash back in the form of checks.  I have never paid this credit card company one cent.  I have never had to pay a late fee or an interest charge.
  • When my husband and I have cash in our pockets, we are more likely spend money on little things that we don't need like sodas from pop machines.
    • I can't even imagine how much money I saved while I would be at school all day because I did not have any cash on me.  Every day I would have liked to buy a soda or bottled water, and snacks out of the many vending machines located all over campus, but I instead would get a drink from a water fountain and eat something that I brought along with me.  
    • Every time my son and I go to the mall, or grocery store he wants to get a treat out of the candy machines.  I really don't want him to have this junk, and I can't stand lying to my child, so it is really nice to be able to truthfully say:  "sorry, I don't have any cash on me".  That really helps to stop any fits for stuff like this because he knows that since I really don't have any cash on me, throwing a fit is not going to change things.    
  • When my husband and I carry cash on us, we end up "losing" it.  On several occasions, my husband or I have truly just lost a $20 bill right out of our pocket when we reach in to get something else and the money falls out on the ground.  We also "lose" money when we use cash because we truly just don't know what we spent all our money on.  My husband and I used to occasionally have disagreements when one of us would have X amount of dollars and then end up spending it all and not know where it went.  It is so much easier for me to track our spending when I can just get right on the computer and log into my online account and see exactly where the money went.
Things to consider when using credit cards:
  • Don't sign up for a card that has an annual charge!
  • Become familiar with all the terms and conditions of your card.
  • Don't sign up for more credit cards than you can keep track of.  If you do, you will be much more likely to end up with late fees and interest charges.  If you do accidentally end up with a late fee-consider calling the company and asking them to waive the fee.
  • Don't ever use a credit card to buy something unless you have the cash to back it up.
  • Don't use credit cards if you find that they do cause you spend more money than you normally would.
  • Sign up for online bill pay if you regularly use your email.  This really helps me to keep my bills organized, and helps me avoid making late payments.  I get an email when my bill is ready, then I just get on my account online and set up my payment as soon as it comes.  
  • Don't fall for the credit card companies ploys to get you to owe finance charges, such as the checks that they periodically send out for you to use.  They normally charge an extra 3% or more finance charge just for using these.


  1. I think this post is fantastic. I get very frustrated with the "credit cards are evil" philosophy I see around. We never, ever have a finance charge; we never charge more than we can pay off. We don't use cards with fees. We've gotten many useful items using credit card points.

    It also gives me more flexibility at the grocery store than a wallet with cash. If I see a great deal on a product I use a lot, I can stock up and not worry about running out of cash (as long as it won't run up my bill to a point I can't pay it).

    In my deep dark past I had credit card problems but my husband straightened me out. Now we use cards as much as possible and reap the rewards.
    Of course people who have problems with cards shouldn't use them.

    Great post!

  2. I am not against credit cards. I think that demonizing them is irrational. The one thing that I heard though was that applying for numerous cards is a hit against your credit score. That would be my only real concern as it might negatively affect my score. Any thoughts??

  3. I am against credit cards, just because I have seen too many people who can't control their spending. But I say good for you for being able to keep a handle on it. They are much handier than cash, until they get you into trouble. Thanks for the post, it is always good to hear both sides.

  4. There's also the protection credit cards offer. If your wallet is stolen, any cash you were carrying is gone. Any charges the thief racks up on your credit cards will most likely not be your responsibility.

  5. Great post! I also wrote a How Credit Cards Work for Me article with similar tips. For me, it was very important to track all my spending, deducting credit-card purchases from my spendable money right away so that I'd always be able to pay the bill when it came. After several years of doing that, not spending too much became second nature.