How to Use Credit Cards to Your Advantage… and Not Get Ripped Off
In our household we’ve made a big shift in the last two years. After 6 years of only using cash/debit for purchases, we stopped using our debit card almost completely.
For spending, we exclusively use credit cards.
There’s a catch though. We use our credit cards like debit cards. We only charge what we could pay off immediately. And then… we pay it off immediately.
In fact, I pay off our credit card balance every week. It’s my Friday morning routine: pour some coffee, let the dog out, solve today’s Wordle, and pay off both credit cards.
I always advise my clients to pay off each credit card balance at least once per month. BALANCE, NOT MINIMUM. This way, we are not charged interest. We love interest to make our savings and investments grow. But interest is a killer when it’s used against you.
Okay so you now know why we pay off the balance to avoid interest. But there are many other benefits to doing this extra bit of work.
Cash back
We get about $100-200 back in our pockets every month just by doing this. That’s nothing to sneeze at, friend. $1,200-2,400 per year gets us a weekend away or a maybe even a day at DisneyWorld for our family of five!
Travel Savings and Rewards
Depending on how you utilize points, that could also translate to some pretty sweet discounts on trips, booking changes, car rentals, and other incentives.
Fraud Protection
Last winter I was curious about a bidding site, and during a moment of serious judgment lapse I signed up for it to check it out. I shouldn’t have been surprised when my credit card was charged just for signing up, but I was. And even though it was only a few bucks, I wasn’t having it. After a fruitless dispute claim with the merchant, I filed a claim with my credit card company and a few days later, the charge was reversed. And I learned a valuable lesson.
Purchase Protection
Ever buy something and get much less than you bargained for? Me too, friend. We once ordered a new cover for our hot tub online and were quoted a 3 month lead time. That 3 months was then delayed and before we knew it we’d been waiting nearly 8 months, and the merchant refused to cancel and refund us. A quick call to our credit card company was all it took to have that money refunded so we could find a better option.
Now, I must disclaim. This was an exception. “Let the buyer beware” still applies. I don’t go around making claims against every item I buy that’s less than perfect. And I always contact the merchant and attempt a return first. But it brings so much peace of mind knowing that my purchase decisions are more insured than they would be with my debit card.
Barriers to Access
Often when booking lodging for trips, a deposit is paid or held. On our latest trip that deposit was $500. Even if the hold is refunded, I don’t want that $500 charged to my checking account via my debit card. Using a credit card gives us those additional fraud protections and provides a barrier of protection from full access to our cash.
Switching to credit cards for our everyday spending has been a game-changer for us, and it’s all about using them wisely. By treating our credit cards like debit cards and paying off the balance weekly, we avoid interest charges and maximize the perks that come with credit card use—cash back, travel rewards, fraud protection, and purchase protection.
These benefits add up, not just financially, but also in terms of peace of mind. We’re able to enjoy rewards that enhance our family experiences, and we have a safety net when purchases don’t go exactly as planned.
Of course, discipline is key. This strategy only works if you commit to paying off your balances regularly and avoiding the trap of interest charges. But with a little extra effort and mindful spending, credit cards can be powerful tools that work in your favor. For us, it’s not just about convenience—it’s about making our money work smarter, so we can enjoy more of what life has to offer without the financial stress.