Last week, I wrote an article that claimed nearly everyone needs a credit card. And to be honest, it wasn’t all that controversial.
I merely explained how difficult it can be to rent a car or get hotel reservations without some form of credit, and how certain perks, such as travel insurance, fraud protection, and rental car insurance can be lucrative and beneficial.
But my post ended up on Yahoo News. And not surprisingly, the freaks came out of the woodwork to tell me I was wrong, and argue that credit cards are nothing more than a huge scheme. Here are a few of the gems:
“Credit cards are just another money making scheme, they know people are going to max them out and they will be happy to let you pay the interest. ”
“I’ve done without one for years. We all pay with higher prices for the “perks”. Or do people think money grows on trees? Never mind, this is America we’re talking about. Go lick a banker’s boot.”
“For every dollar cash back you pay several times that to the credit card companies. There is no free lunch.”
Are Credit Card Perks Free?
I’m not arguing that credit card perks don’t come at a cost. Obviously, someone out there is paying for them in one way or another, either through credit card interest, annual fees on cards, or other means. Meanwhile, retailers who accept credit as payment must fork over 2 – 4% of each transaction to the card issuer, which is undoubtedly a whole lot of money over the weeks, months, and years.
Those costs generally get passed onto the consumer, which means higher prices. But boycotting credit cards isn’t going to change that trend any time soon. Credit cards are surely here to stay, so you’re forced to pay that extra 2-4% unless you can work out some sort of cash-only discount. Why fight the inevitable?
And you know what? If you never pay interest on your credit card, and choose cards that do not charge an annual fee, you can pretty much rob credit card companies blind every year. And I should know.
Scoring Big with Credit Card Rewards
Last year when we were stranded in Jamaica for two extra days due to wicked winter weather, the travel insurance offered by my Chase Ink Bold card picked up the tab for the $580 it cost us to spend two additional days. And, have I ever paid them interest? Well, hell no. Of course not.
And each time I rent a car, I always use a card like the United MileagePlus Explorer card that offers primary rental car insurance to pay. Why? Because it offers the coverage free of charge.
In addition to those perks, I cashed in over $20,000 of points, miles, and cash-back in 2014, all while traveling to places such as Jamaica, Orlando, Denver, London, Paris, New Orleans, and Minneapolis, and all without paying a cent of interest.
Someone is paying for those perks – true – but it sure as hell isn’t me. And it doesn’t have to be you either.
Never Pay Credit Card Interest with this Simple Trick
Complaining that the 2-4% retailers pay to use credit gets passed onto consumers doesn’t change the fact that it happens every day. The only way to end up ahead is to find a way to use credit to your advantage; sign up for a simple cash-back card, pursue travel rewards, or use some of the other benefits credit cards offer, such as price protection or rental car insurance.
And if you want to avoid paying interest and score all of the perks that rewards cards offer for free, all you need to remember is this:
Pay your credit card in-full and on time. Every. Single. Month.
Never put more on credit than you can afford to pay off immediately, and never use credit to buy anything you cannot truly afford. Don’t use credit as a crutch to get by when you are struggling, and never use it as en excuse to spend more than you would otherwise. Remember that only you have the power to avoid paying interest. Seize that power, take credit seriously, and refuse to become another statistic in the sad, sad world of credit card slavery.
If you’re unable, you’ll simply be paying for the rewards of others. Sure, someone has to, but that doesn’t mean it has to be you.
Do you ever pay interest on your credit cards? Does it make you angry that credit cards exist?
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