About a year and a half ago, I started making an effort to use my debit card instead of a credit card for most of my purchases. I used to be not-so-great at keeping track of finances and I would often find myself charging dumb stuff to my credit card and forgetting about it... that is until the bill came and I didn't have the money to pay it off. My other problem was that I didn't track all of my credit card purchases and they would add up a lot faster than I would realize. Although I generally only charged items to cards that had a 0% APR, I was still spending more than I could afford without realizing it.
Many credit cards offer pretty good rewards for charging even the smallest purchases. (Like a 79 cent Slurpee...) But if you have a bad record with paying off those purchases in full each month, the rewards might not be worth what you'll end up paying in interest. So because my record isn't that great, I use my debit card for everything. If I only allow myself to spend money that's in my bank account, I'll never find myself with a bill that I can't pay. The only exception to this is when I purchase large ticket items and unexpected emergencies. If I'm going to buy something pretty expensive, I've usually budgeted for it and I won't forget that I charged it... so I put it on a credit card so that I can get the points or miles.
My boyfriend is the opposite. He charges everything and pays it off in full every month. He claims that credit cards companies actually pay him to use their cards because he gets tons of points and cash back rewards, but never pays a dime in interest. If you can pull this off, work it!
So which kind of plastic do you prefer? Have you come up with a system that works for you?
Many credit cards offer pretty good rewards for charging even the smallest purchases. (Like a 79 cent Slurpee...) But if you have a bad record with paying off those purchases in full each month, the rewards might not be worth what you'll end up paying in interest. So because my record isn't that great, I use my debit card for everything. If I only allow myself to spend money that's in my bank account, I'll never find myself with a bill that I can't pay. The only exception to this is when I purchase large ticket items and unexpected emergencies. If I'm going to buy something pretty expensive, I've usually budgeted for it and I won't forget that I charged it... so I put it on a credit card so that I can get the points or miles.
My boyfriend is the opposite. He charges everything and pays it off in full every month. He claims that credit cards companies actually pay him to use their cards because he gets tons of points and cash back rewards, but never pays a dime in interest. If you can pull this off, work it!
So which kind of plastic do you prefer? Have you come up with a system that works for you?
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