I believe a credit card should be a tool, not a toy. (I view most things as a tool first, or maybe both if I get a really, really cool tool, like the Garmin 620). Years and years ago I bought a credit card, just to kind of have, but about two years ago I stepped up my game and got a legit credit card. I created this list because I decided on a card for only a few reasons (I’ve seen top ten stretch out four points being only for specific types of points, lame-o). My person card is the Chase Sapphire Preferred (for the record, that’s not an affiliate link, I just want to show you the benefits page; one day I might monetize this site, but right now I want to do it out of a labor of love!).
Rack up points!
Okay, the first and foremost reason that I got the CSP card is it has a bomb-ass intro bonus. Like, spend $3,000 during the first three months and get a free car (haha, okay, 40,000 points). With the said 40,000 points you then have $500 of spending power of Chase’s Ultimate Rewards site. (Yeah, it’s proprietary, but you know that going in and you still get a really good deal. Different cards will have different points and rewards structures so ostensibly find the card that fits your needs. I wanted to travel around the world (long story; didn’t exactly happen that way), so getting a travel card saved me some cash. Even though the CSP doesn’t have the best structure for me, it’s still better than nothing…
This is what I think about getting a credit card comes down to (not that the other points aren’t important, but, alas): You’re going to be buying shit on a plastic card (or in my case, metal), why not use a rewards card, pay it off every month (KEY POINT!), and rack up the points to buy something nice at the end of the year? A debit card is only an electronic check. A rewards card you can at least earn something for engaging in the same activity, i.e., electronic transactions.
Build your credit!
Here’s a fun one all of the rage when requiring financing: your credit! By having a credit card, using it, and paying it off you build both credit history and increase your credit score. Don’t actually max out because the credit bureaus calculate part of your credit based of percent used (if you only use $1,000 out of a $10,000 limit, it shows you have 90% available); thusly, it’s not a bad idea to increase your limit because your percent available will also increase, assuming your spending habits remain the same.
And for what it’s worth, you’ll still probably get financing with a slightly lower score, but you’ll pay more via a higher interest rate. Which does add up over time. There’s no reason to not have a higher credit score.
The last point I want to make comes from the capability to use a credit card as an emergency fund. Keyword: emergency. I have 85+% almost always available on my credit cards but if I need to ever use them, I can (NOTE: there are instances that you can’t use a credit card to pay off a bill; I’m pretty sure no bank in the world will accept a credit card payment for a mortgage).
Those were my Top 3 reasons I got a rewards credit card! If you get a nicer one, they come with a plethora of features and benefits (literally, plethora, look up it English majors). There’s that stigma that you can use and abuse a credit card into years of debt but with the property game plan one will serve you as a financial tool. Take a look to see what is out there that may help you out, even if it’s only a few hundred extra bucks per year.