I charge everything to my credit card. Everything. I know that goes against what I told you about credit cards, but this is a bit different.
When I told you to stop using credit cards, I meant you should stop using the credit part, not the card. If you pay off your card in full every month, you pay no interest. If you don’t pay it all off, you are paying up to 30% to borrow that money.
So, I do charge everything. I pay it off in full twice a month (on payday). My balances are never high, so my credit score stays up. I pay in full, so I pay no interest. And, importantly, I get paid by the credit card company to use their card!
I currently use a Chase credit card with rewards. I get 1%-5% back on purchases depending on the type. I used to use a Citi card where I got 1% back across the board. When you would buy something anyway, why not reap the benefits?
A credit card company charges merchants each time the process a transaction. The fees are negotiated between the merchant and the processor, but costs are usually about 2% or more. If the bank gives you 1% back, they are just splitting the profit with you. Either way, they are making money. You should make money too.
If you have a real spending problem, do not use credit cards. If you don’t, and can live on a budget, it is time to get paid by the credit card company.
Now go forth and earn rewards. Check out CreditCards.com and CreditRatings.com for some comparisons, but do research on your own too, don’t just trust them. Make sure, when signing up for a card, that you don’t have a lot of other new credit (or your score will go down). Pick a card with a low interest rate (just in case) and no annual fee. AMEX has great rewards, but you have to spend a lot to make rewards that pay off the annual fees. I shopped around at CitiBank, Chase, MBNA, Bank of America, and a bunch more. I picked the card I use for several reasons. 1. They paid me $50 when I signed up and used the card once, no other strings attached. 2. No annual fee. 3. Cash Rewards (points are okay if you would really use them, but I like cash). 4. Reputable bank. 5. Low interest rate.
If you have any questions, leave them in the comments. Otherwise, I expect that your credit card will be paying you shortly.