Credit cards are a great way to make money. I've always been a financially conscious (and even a little frugal) person at heart. No, not the type who skimps on everything, but always interested in ways to spend less on the same stuff... clipping coupons, spending way too much time online to find the lowest price for that special something, even searching high and low for online coupons and deals.
One of the best deals I've ever found is right under your nose – a credit card. Well, with one caveat: "as long as it it used correctly".
Most of us use credit cards. If you don't, you should (read on). Some people use debit cards, which are different. A credit card allows you to spend someone else's money, then pay them back later. If you pay it back within a certain time-frame – usually 15-20 days – you don't have to pay any interest and end up getting a FREE loan. If you pay the money back after that date then you have to pay interest (BAD). Debit cards are a ripoff. They are like plastic cash. They automatically take money out of your bank when you use them, and you don't get a FREE loan. So what's better? A credit card, as long as you pay it off every month.
If you choose not to pay off a credit card every month, then you may be living beyond your means. No lecture here.
Which credit cards are the best? The ones that are 1) fee-free (no annual fee); 2) give you free stuff; and 3) charge low interest if you carry a balance. Always avoid carrying a balance, though, as that means you're spending too much. I use a credit card for EVERYTHING in order to get the most points.
Article comments
1 - Joanne Huspek
Good tips, all.
Credit card rewards through uPromise helped a ton with two kids in college. In the boom days, we were getting a $300 rebate for each GM car we bought (three total per each person per year). I like this better than the rewards miles.