Why use a credit card?

April 18, 2009

in credit,spending

Despite the fact that we are still digging our way out of debt (we’re down 17%!), we recently started using  a credit card for our everyday purchases.

Credit Cards
Creative Commons License photo credit: Andres Rueda

I’ve always been a big believer in using my debit card AS a credit card. Especially since our bank charges a $1 fee after you make more than 9 ATM or debit purchases in a month.

Many personal finance experts will recommend against using a debit card as credit card since it does not offer the same benefits. Yet when my account number was stolen my bank quickly deactivated my card when a $600+ purchase at a Walmart (ew) in California (never been), was attempted. The $130 they did manage to take was immediately put back in my account. Maybe my bank is just that awesome, but a recent experience has me singing a different tune.

When going out to eat for a “date” with my girls my credit/debit card had a hold placed on it for $65 when the server accidently rang through another table’s purchase. The hold happened on a Saturday, and was there until Thursday of the following week. Nothing to  worry about, but definitely inconvienient.

Since we had just paid off one of our cards that we intend to keep I decided it was time to try to use the skills we’ve learned about managing money (don’t overspend!) with the benefits and protection of using a credit card.

We did an experiment last month when I purchased my plane ticket for San Francisco, and a mattress for my son one the card and paid it off immediately and in full this month. I can honestly say it’s the first time I’ve ever paid a card in full and not used my credit card as a tool for affording things we couldn’t.

We’ll see how we do this month. I’ll update you at the end of our “month” (really 28 days ending mid May), here’s hoping my experiment works! So far I like having money in savings, and an empty credit card. It actually feels pretty good!

Kelly

© 2009, Whalen Media LLC. All rights reserved. To repost or publish, please email Kelly.

About Kelly


Kelly Whalen is the founder of The Centsible Life, a blog where motherhood and money meet. Her goal is to help readers live well on less. Kelly is a mom to 4, and loves that she can stay at home with her kids, and still pursue her passions for writing, personal finance, and social media. You can often find her on twitter and Facebook talking money and motherhood.

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Tagged as: credit cards, spending

  • Nicole Young

    Credit cards are an indisputable fact of life and there are many good reasons to have one. They give you protection for your purchases, allow you to shop online, and provide a cushion in case of emergencies. But when you sign up for a credit card, you are responsible for paying bills.

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  • http://www.mondaymorninggold.com Spencer

    Over the past decade my wife and myself have used credit cards to pay for everything during the month and at the end of the month we pay it off. Well… that was the intention. When bad times hit after 9/11 we were lucky to have such good credit and the ability to float us for years. Now we are paying for it all.

    Using credit cards is a great idea and can be dangerous if not managed well.

    Good luck.

  • http://www.mondaymorninggold.com/ Spencer

    Over the past decade my wife and myself have used credit cards to pay for everything during the month and at the end of the month we pay it off. Well… that was the intention. When bad times hit after 9/11 we were lucky to have such good credit and the ability to float us for years. Now we are paying for it all.

    Using credit cards is a great idea and can be dangerous if not managed well.

    Good luck.

  • Kelly

    Ha! I always spend more when I use cash! I don’t know why some people swear by paying with cash. I ALWAYS spend 5%-10% more that way!

    Debit is usually okay for me since I can track my expenses, but occasionally I’ll overspend that way too.

    I have the credit card set up to send me an alert when I near $x amount. Hopefully that will keep my spending in check. :)

  • Kelly

    Ha! I always spend more when I use cash! I don’t know why some people swear by paying with cash. I ALWAYS spend 5%-10% more that way!

    Debit is usually okay for me since I can track my expenses, but occasionally I’ll overspend that way too.

    I have the credit card set up to send me an alert when I near $x amount. Hopefully that will keep my spending in check. :)

  • http://manvsdebt.com Baker @ ManVsDebt

    Good Luck!

    For me, you are playing a dangerous game. Even at my times of best control, I would venture to say I spent at least 2% more using credit than I might have using cash/debit.

    I hope it works out for you!

  • http://manvsdebt.com/ Baker @ ManVsDebt

    Good Luck!

    For me, you are playing a dangerous game. Even at my times of best control, I would venture to say I spent at least 2% more using credit than I might have using cash/debit.

    I hope it works out for you!

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