Why Credit Cards?

It's not just about cashback. Take a look at some lesser known perks below!

Aside from the benefits above, the cashback or points & miles you earn through everyday spend are generally most valuable when used towards travel. There are two ways I look at this:

a) SAVING MONEY - without much effort, you will be getting on average 2-3% back on all your purchases throughout the year.

b) UPGRADE YOUR TRAVEL - spend the same amount as you otherwise would, but use points to upgrade your travel, whether that be flying business class or stay at 5-star hotels for free!

Who Credit Cards Are Not Suitable For

Before jumping in, check if any of the following apply to you:

1.  Not Paying In Full Every Month

If your current financial situation prevents you from being able to pay your full balance down each month, credit cards will probably harm you more than they can benefit you. For example, if you sign up for a card like the Chase Sapphire Reserve to earn 3x on dining and travel, but end up carrying a balance and paying 17-24% compounded interest until you pay off your debt, you lose way more than any cashback can earn you.

No amount of points or cashback can justify carrying a 24% interest

2. Spend More To Chase Bonuses

The whole idea of having credit cards is that you continue to spend as you normally do, whether that be in cash or on a debit card, and the profit will be in the rewards you earn on top. However, if credit card offers change your behavior in a way that you end up redeeming offers by purchasing items you never needed in the first place, this may not be financially healthy for you.

Amex Offers: Unless you were going to make a Ferragamo purchase anyways, you may actually be spending way more than you really need just to earn the extra points

3. Unorganized and Forgetful

If you only have a few cards to manage, it may be fine. However, for many of us in the "credit card game", we end up applying for 10+ cards across many banks. It is important to stay on top of your due dates, transactions etc to ensure you don't miss payments, have bounced checks, let your miles expire, or paying for annual fees on cards that no longer benefit you. In future posts, I'll share in more detail how I keep track of my cards and finances.

I use a Google Sheet to track my card details

Next: Personal Experiences