How to Build Financial Success with Credit Cards

By Sunday, October 27, 2019 6 0

Say Hello to Credit Cards

Hello Credit!

We are living and spending in modern times so it’s a good time to understand why you should spend most of your money on credit cards. Debt has always been crippling. Since the invention of credit cards in the 1950’s and it’s evolution into the 60’s people have had a love hate relationship with credit cards. It’s interesting to learn the history of something as pervasive as credit cards. History is one thing but modern times is another.

Are Credit Cards Bad?

The credit card has evolved both conceptually and practically in the last 50 years. The magnetic strip technology came out in the 80’s and people started swiping and of course going into debt. Credit cards have interest rates and of course peoples debt only grew over time often with disastrous consequences. It turns out that credit cards have a small built in pitfall. They encourage people to spend because they decouple the consequence of the actual loss of money from the act of spending. You can see where this would easily build debt for people. After all the debt was racked up credit cards were demonized as the tools of irresponsible fools. To cure this people often literally cut up their credit cards to curtail out of control spending. Spending with cash became more popular with the wisdom of “you can’t spend what you don’t have”. The prevailing attitude from this reality is that credit cards are bad.

The Evolution of Credit Cards

Over time things have continued to change. The internet gave people online access to manage their accounts. The software industry became bigger and credit card companies started dumping resources into developing their online portals to give a first class experience to card holders. This gave people transparency into their spending and also automated many interactions between the bank and the card holder.

Emotional Evolution

While technology evolved so did peoples relationships with credit cards. Many people learned that credit cards don’t put you in debt if you pay them off every month. Doing this can build a credit history that would result in you being a more reliable loan recipient in the future.

Mixed Messages

Peoples relationships with credit cards and attitudes about money are usually determined pretty early in life. They are told one thing by what they consider to be a reliable source and then never consider things for themselves. The internet has changed things quite a bit though because such a massive amount of information is available.

Advice has an Expiration Date

We are seeing what might have been good or reliable information years ago is now out of date advice. An example of this is home ownership. It used to be the American dream to own you own home but the internet has given many experts an avenue to show that it’s not such an admirable dream. Home ownership will make you pay taxes, tie you to a geographic area limiting your earning potential and keep you on the hook expensive upkeep like water heaters and roofs. There are definitely good reasons to own a home that make sense for a lot of people but you can see where this very old wisdom has a lot of problems with it. The same analysis is true of credit cards. The old wisdom was that credit cards will put you in debt and keep you there with oppressive interest rates. There is still the danger of debt but it’s entirely in your control. The truth is if you use credit cards wisely they will give you rewards and help you understand how you are spending your money. If you have a main credit card then you have only one stop to get a full overview of how your money is being spent.

Time to Use your Credit Cards … Wisely

In today’s age you would be crazy not to use your credit card for literally everything. The cards web portal will aggregate and run all kinds of analysis on your data for free. Everybody benefits from this data acquisition. The credit card company benefits because they gain insight into what you spend your money on. More importantly is you get a record of where every dollar from your pay check went. You might find the right credit card for you here.

Make the Change

If you aren’t spending with a credit you should really consider making the shift because understanding your spending habits will make you more responsible and help you ultimately preserve wealth. If you are currently using credits cards for the bulk of your spending then consider consolidating to just one credit card. You’ll get greater clarity in one location instead of trying to piece things together over several accounts. The other critical reason to spend through credit cards is reward programs.

Reap the Rewards

Rewards are literally banks just giving you money. You can take these rewards any way you want but my favorite is cash. This can be an organic tool to make money without much change. I take more rewards through cash and just about every other month I’m dumping money right into my bank account with no fees and no nonsense. If you are someone that likes to travel or have some other preoccupation then there is probably a reward card for that. Seek and you shall find. Don’t be bamboozled by “status” cards or a company logo. Get the card that makes the most sense to you. I’ve seen on many occasions people do something that is overall a bad idea so they can feel like they are part of something. Don’t keep your Capital One card because it’s the first one you ever had. Find the one that is right for your needs and use that one. Don’t forget that a credit card should not have an annual fee. There is just no justification for it. Nobody should charge you to spend your own money.

A Picture is Worth 1000 Words

I’ve put all these wise words into a picture below. Check it out and share it with others. The picture outlines a simple message. Use your credit and you’ll be rewarded in a multitude of ways.

Share the Wisdom

You can embed this infographic with the html code ,

<img src=”awesomepersonalfinance.com/wp-content/uploads/2020/07/using-credit-cards.jpeg”>

Do you have a favorite credit card? Tell me which one in the comments below. Click the Facebook link below this post to share.

6 Comments
  • Will | MillionaireManCave
    June 29, 2020

    Excellent post my friend! Keep up the great work!

    • Adam Wilson
      June 30, 2020

      Thanks for checking it out.

  • Bella Wanana
    July 4, 2020

    Excellent post! I especially appreciate how you talk about the history of the credit card. I definitely learned something.

  • Adam Wilson
    July 6, 2020

    I’m sure most people don’t know the history so I wanted to put it out there.

  • Jonathan
    August 21, 2020

    Thanks for sharing your perspective, I think it can help people expand from their previous assumptions.

    • Adam Wilson
      August 21, 2020

      Thanks for stopping by.

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