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If you aren’t able to pay the credit card off, you should factor that
intowhich credit card you apply for and chose one with friendly interest terms.
Once you have paid off the balance, rewards points are deposited to your account. If you signed up for a card with a lucrative sign-up bonus, for example, “Get 50,000 Southwest points after spending $2,000 in the first 3 months”, once you hit that $2,000 spend, 50,000 extra points will hit your Southwest account. And of course, that is in addition to any points-per-dollar benefit your card offers as well.
Debit, debit, debit
And that is basically it. I always recommend people who are new to credit cards to just swap it out for the debit card in your wallet and start putting all of your expenses on to that one card. Credit cards usually have much better rewards terms than debit cards (because the banks get more money from them via high interest rates), so funneling all of your spending on one card with help you rack up some great points and hit any sign-up bonus your card might have.
If possible, it is best to keep viewing your credit card through that “debit card” lens and only spend what you can afford. Sure, that new iPhone XS Max Super Awesome or whatever it is called (c’mon Apple, seriously with that name?) is pretty cool, but if you don’t like thinking about what it would do to your bank account if you bought it with a debit card, probably best to pass on it with a credit card.
Sure, sometimes it’s not possible to pay off the full amount every time the bill comes around. Heck, I certainly learned that this summer with our bathroom reno’s – I was still able to pay off the statement balance and avoid interest, but I wasn’t able to pull my card back down to zero. But it is best to try to make credit card interest the exception instead of the rule.
Thanks for the memories, credit cards
There are a ton of different credit cards out there that get some pretty incredible travel rewards. Next week, I’m going to be sharing about some of the favorites that I’ve used over the years that have gotten us years of free flights all over the globe. Without credit cards and their sign-bonuses, we would not have so many memories we treasure from Ireland, Canada, Cali, Europe, New Zealand and Australia.
It’s easy to write them off as some big, dark secret or to get frustrated with how complicated it all seems, but once you lay it all out, it gets pretty simple. If you are new here, check out this post and this post to figure out more of the basics.
The Simple Summary
Be sure to check back next week as I run down the cards that I’ve pulled the most travel out of, and let me know below if there are any cards you are interested in hearing my opinion on!