I really don’t like to idealize credit cards. Points and cash back are a game set up by the credit card companies to subconsciously encourage more spending and make them even more money at your expense. Even if you never pay interest, just a 2% change in your spending behavior from using a credit card will negatively impact you.
THAT SAID, I use one. I’m in bed with the enemy. WHY? Here are the reasons:
• Security. I know debit cards theoretically have the same protection from Visa/Mastercard, but I think there’s a pretty honkin’ big difference between a criminal being able to run a credit card bill (which I just wouldn’t pay) vs someone draining my bank account (where I would actually lose the money and have to fight to get back).
• Credit score. I don’t care much about my credit score, but I recognize it’s a reality of living in the US. IF I ever want to get a mortgage or an insurance provider checks it, paying this card in full every month keeps my score high. (Credit Karma lists my score as 790. I think it would be absurd to try to go into more debt to further inflate the silly score).
• Convenience. A debit card offers this too, but living in the modern world it obviously makes sense to often pay for things digitally and not with cash. I entered my card into my Google Pay account and now can just tap my phone at most stores!
I like this card because it’s among the higher cash back cards out there, and it’s no nonsense. It auto deposits the money straight to my Fidelity account of choice. (Since I’m unemployed, I just have it go into my checking account, but if I were working, I’d probably have it auto invest).
That’s it. I literally never think about it other than to consciously remember not to overspend to chase points. :)
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.