Pick A Card – Any Card
January 10, 2008 – 6:00 am
Dave Ramsey, the syndicated talk radio show host and financial management authority has a firm philosophy about credit cards – cut them up. Although I agree with just about everything else he recommends, I disagree with him on the credit card issue. A few years ago, my wife suggested that we start using our credit card to make all of our purchases. I resisted the idea at first because I envisioned huge monthly bills and uncontrolled spending. However, it has actually ended up “saving” us money.
The reason for the windfall is we only spend money on what we buy. I know that sound confusing but let me explain. When we were using cash, we would stop at the ATM machine before we went to the grocery store and estimate how much money we would need to purchase our groceries. Of course, we didn’t want to come up short, so we always withdrew a “little more” cash than we actually thought we needed. Over the course of a month, that “little more” here and there added up and it also just disappeared. Once we started using the credit card to pay for our groceries, gasoline and other living expenses, that “little more” cash stayed in the bank.
We use a Capital One card that gives us a one percent rebate on our purchases at the end of the year, so we also get a little extra reward for using our credit card. Of course, my wife would prefer that we use a card that offers a more vacation oriented reward like free frequent flier miles. In fact, the credit card companies offer all kinds of rewards from low interest rates to cash back. Just visit Bankrate.com where you can select from a host of credit card reward options.
Of course, if you are concerned about the interest rate on your monthly credit card balance, you’re already in trouble so disregard this article, pay off your balance as soon as you can and then follow Dave Ramsey’s advice. However, if you’re financially responsible and use your credit card as a financial management tool, head over to Bankrate.com to find the best tool for the job.
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