WHY YOU SHOULD USE CREDIT CARDS

If the fear of credit cards has been instilled in you, you need to read this post because I am going to tell you 3 things you need to do because you can actually MAKE money from your credit cards!

If you haven’t started the November Home Organizing Challenge, don’t you worry because it’s NEVER too late to get your home in order.

This home organizing challenge is a very helpful preparation for our Finance Organizing Challenge which starts next month! Click here for the link to the challenge and an essential sorting guidelines chart.

So, let’s clear things up first so there is no confusion for what I am about to tell you. And, to give you fair warning, I am going to tell you some things that are the OPPOSITE of what a lot of financial gurus will advise you.

First, before I get into why you should use credit cards, if you have existing credit card debt, STOP USING YOUR CREDIT CARDS.

I don’t believe in wasting your money on finance charges and late fees. Recently, I posted some real-life numbers on Instagram about a friend’s credit card debt and what would happen if she didn’t pay it off. Her $5600 balance would have accrued $76.55 in one month at her 15.99% interest rate if she didn’t pay it off. AND, if she paid nothing toward that balance in one year, her balance would be $65000.00! Finance charges are not worth it and carrying a balance is not worth it no matter what. Your throwing away money, honey. Now, I will be showing you how to pay off credit cards and save AS MUCH AS POSSIBLE on finance charges next month but for now, let’s get into what you came for which should encourage you to pay off your cards even more quickly so that you can do this:

1. USE YOUR CREDIT CARD WITH THE BEST REWARDS

So, if you have credit cards that are paid off, use them! Choose the one that has the best rewards and focus on using that card. If you don’t have a credit card that offers rewards, then, get one! If you shop at Costco, get a Costco credit card. One, you will be able to get the most affordable gas. Two, if you already shop there, it’s a no-brainer. Three, the cashback you earn on all these things you normally have to purchase will cover your membership fee. Four, there is no additional annual credit card fee. Or, if you travel a lot, use a card that has travel rewards. Whatever makes the most sense for you, get that card.  It makes me crazy when people who have paid off their credit cards and are great at living within their means and they say, “I only use my credit card for gas” or whatever and it’s a very minimal amount. And they’re talking about cards that have great rewards. WHY?!?! WHY?!?! So, this leads me into my next thing you need to do with credit cards …

2. USE THIS CREDIT CARD AS MUCH AS POSSIBLE

If you can get cash back or travel points that could add up to free flights, why aren’t you using your credit card as much as possible? I would even use my credit card to get supplies for work and church. I was being reimbursed! So, while I was doing my normal shopping, I would have separate transactions for work and church supplies, be reimbursed for the stuff that wasn’t mine and all those purchases, my own and for others, accrued rewards over the year. So, once a year, I was getting back hundreds of dollars in rewards for things I would normally swipe my card for anyway whether it was a debit or credit card or even cash. If you need to pay for these things anyway, why aren’t you using your card? This leads me into my next thing you need to do with credit cards …

3. KNOW HOW TO TRACK YOUR CREDIT CARD CHARGES

I know I’m being dramatic about wanting to scream “WHY?!?!” at those who have no credit card debt and are not using their credit cards to the max … but I KNOW WHY. It’s because, well, besides the fear that has been instilled in us to NOT use credit cards, most people don’t know how to track the use of their credit cards. This is the most important to learn. Yes, it is a little tricky to track the use of your credit cards. For the longest time, I didn’t even have a credit card. It is A LOT easier to track your finances if you just use your debit card and have one bank account. When you charge your debit card, the charge is immediately debited from your account so it’s a lot easier to stay on top of your finances. You only need to track if you have written any physical checks.

When you use a credit card, a lot of people get in trouble because the charge isn’t visible immediately and can even take DAYS to clear. Then, the transactions charged today, aren’t due for a month from now. So, if you aren’t tracking your stuff correctly, then, you can easily go beyond your budget and get caught in a horrific cycle of compounding interest that takes you further into debt. Thus, the birth of credit card debt and the understandable fear of credit cards. So, when I got a credit card, it totally changed up how I tracked my budget. I had to have a whole other tab where I tracked the charges to fit within my credit limit and within my budget. When, I figured that out, I was loving it! I was like, heck yeah, I’m gonna earn rewards like crazy because I am going to use this card on EVERYTHING I can. I actually am disappointed when I can’t use my credit card because I won’t get to earn rewards! Oh and I have to give another example about why I understand tracking credit card charges is difficult. When it finally came time for me to begin to share my passions with you, I knew I needed to share about organizing your spaces and finances, but I couldn’t decide which to share first. Obviously, I have shared about organizing your spaces first and have written my book but while I was polling my friends and loved ones about what to share first, I found out one of my friend’s was still using my budgeting system. I actually COMPLETELY forgot that I showed it to her! She said it was working really well for her for awhile until they accrued credit card debt and couldn’t track their finances between their credit cards. So, first, I was so excited that I completely forgot that I showed her my system and it worked well for her. And I NEEDED TO SHOW HER HOW TO USE IT WITH A CREDIT CARD! OH. MY. GOSH. Second, it was a confirmation that I needed to share it with everyone asap. In addition, it was also a confirmation that I needed to show people that it is a lot easier to track your credit card charges than you may think! BONUS: interest rates don’t matter if you pay your credit card every month!

We are going to organize our finances next month, my friend, so be sure to download the home organizing challenge here to help prepare you for next month’s challenge.

I will be showing you, next month, exactly how to insert the use of credit cards in your budget so that you can maximize rewards, so be sure to subscribe to my YouTube channel and click the notification bell so you don’t miss that and so you never miss another organizing video.

Happy Budgeting!