Best Debt Advice

Benefits to using credit cards to pay for everyday items

 

Raise your hand if you like to shop.  If I told you I would pay you to go shopping would you be up for it?  A big Yep huh, I thought so.  Well, that’s exactly what many credit cards do.  The best debt advice is to use that credit card to get paid.  There are great benefits to paying for everyday items on credit card… if you pay your card in full every month.  Let’s explore:

Sample Budget for family of 4

$2,000 spent a month on credit card for  – bills etc.

$24,000 a year @ 2% cash back

=        $480 Cash in your pocket per year

6% Compounded growth over 18 years

= $16,204.80 …. Wow, that’s not shabby

You may be thinking $480 a year doesn’t sound like a whole lot of money but calculate how much you make in a day vs. $480. Let’s say you happen to be a young couple who’ve just had a baby.  Do you want your baby to grow up and go to college?  Well let’s say as soon as your baby was born you took that $480 a year and were able to make a compounded 6% interest per year over the course of 18 years.  That measly $480 a year turns into…..drum roll please … $16,204.80.  That kind of money won’t keep your kids in college but it should at least help pay for the books.  Best of all is this happened without you spending a dime of your own money.  You got paid big time for shopping and just spending the same money you were going to spend. That’s pretty cool.This could be a wise addition to a solid budget plan.  Don’t get any ideas like oooh if I spend more money I’ll get more back.  Bad thought…bad thought.

Maybe you’re just not really into money then you can use your everyday purchases to get a ton of airline miles from your credit card and then you can take a vacation from buying everyday items.

Or maybe you’re into gas.  Imagine getting a free tank thrown in once a month.

Here’s a more complete list of either discounted or free items you can get by using your credit card for everyday items:

Movie Tickets

Home Appliances

Clothing

Meals

Car Rentals

Hotels

Gift Cards

And trophies – only if you’re a champ!

Isn’t it crazy to think there is someone out there who is getting paid to come with all the cool things you can get if you spend money using their cards. That sounds like a sweet gig.

These can be very enticing and if you don’t keep a balance on the card it may make sense to consider.