5 Ways to Make Your Credit Card Work For You

For the most part, I have had a pretty good relationship with my credit cards. We didn’t get along perfectly in the beginning, but we’ve worked out our differences over the years. While some folks believe credit cards are the devil, I am a huge proponent of using credit responsibly. The important thing to remember when swiping the plastic is to exercise self-control and discipline if you want to make your credit card work for you. It shouldn’t be the other way around. We are the boss of our spending and credit cards.

1. Cashback
My absolute favorite perk of using a credit card is being able to earn cashback on purchases. My American Express card gives me 5% cashback on purchases made at gas stations, grocery stores, and drugstores; and 1.25% on everything else. That’s pretty awesome! My Discover and Chase cards offer great quarterly cashback categories, too! You can request a check for the cashback you’ve earned, or apply it to your bill as a statement credit (this is what I do).

The only store card I have and love is the Target Red Card. If you are a Target shopper, you definitely need the Red Card. It gives you an instant 5% off every purchase!

2. Points
I don’t like the points system as much as I do cashback, but it is still a nice perk. My husband P racked up a bunch of points before we were married and traded them in for my iPad mini last year. NICE! I have an American Express card that offers Hilton hotel points for dining out. Back in my corporate America days, I traveled often for work. Hilton brand hotels were where I usually stayed. We dined out more often back then, so I got the AMEX Hilton card to accelerate my points earning. We are in Florida for P’s interviews right now and points paid for our two nights of hotel.

3. Take advantage of 0% APR for large purchases.
Leveraging your credit can be an extremely helpful tool, but be careful with this one. It takes a lot of planning and self control to make this work. Essentially, it is borrowing money interest-free IF you are sure you can pay off the balance at the end of the promotion period. Better yet, only use this method if you actually have the money, but would rather keep it in an interest-bearing account for a few more months before paying off a big purchase.

4. Build credit.
I attribute much of my 800+ credit score to credit cards and paying them on time. Credit cards are usually the first form of credit for most of us. Practicing responsible credit card habits early on will get our credit scores in tip-top shape when we eventually need it. For me, the first time my credit score ever mattered was when I was buying my car. My score landed me a 0.9% APR.

5. Protection from Fraud and Charge Disputes
Have you ever checked your card statement and found a charge for something you didn’t buy? It has happened to me before and all I had to do was notify my credit card company. They issued a credit on my statement within a few days. I would imagine a similar scenario with a debit card would take a bit longer to resolve, as the money would have already been taken out of your bank account. No one likes waiting to get their money back!

I prefer using my credit cards over debit cards or cash 99% of the time. In fact, I rarely have cash on me (except for my emergency $100) and never carry my debit card. If I were ever to lose my wallet, I wouldn’t have to worry about losing a wad of cash or someone abusing my debit card. It gives me peace of mind knowing that I can call my credit card companies to report the cards lost or stolen, and they take care of everything else.

Credit cards come with many advantages and can be extremely beneficial when used responsibly. However, we can’t ignore the high interest rates if used without proper planning. It’s important to take an honest look at your spending habits before deciding whether credit cards would work for you.

Linking up with Living Well Spending Less and The Thrifty Couple and Pam’s Party and Practical Tips.