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Credit cards are heavily misconceived and mislabeled as a venture. Although credit cards should be heeded with caution, you can also use them for your advantages. It is really what you make of it. 

Credit cards aren’t just for spending. They can benefit more than what the public claims, which is why so many misconceived credit cards. I have met countless number of people who are afraid to open a credit card account. They would rather stick with debit cards, checks, and cash because they believe as soon as they get approved for a credit card, they will go into debt. That’s completely not true. Not knowing how to use, and improperly managing, your credit card will get you into debt. There are plenty of folks who are in debt with credit cards from mismanaging and overusing them, because they like to think this plastic card can get them everything they want. 

Credit cards will allow you to buy the things you want, depending on your credit limit and what you want to buy. It may give you power and freedom, it may make you feel good, buying what you want, but can you pay it back? That is the question that many buyers should ask themselves before making a purchase every time. Just because you can afford it doesn’t mean you should buy it (Suze Orman)! Lastly, there are some folks who get credit cards and use them solely for emergency purposes. Credit cards aren’t just meant for emergency purposes. They can benefit from everyday use, but with a certain management plan, of course. These are common mistakes and misconceptions of credit cards. Properly handling a credit card will do more good than harm, especially compared to using cash and debit cards. There are a lot of benefits that people are prominently missing. You would benefit more and wouldn’t contribute to debt with proper management. 

Keep It Affordable

Using credit cards is like borrowing money. However, they can cost you a pretty penny through interest, late payment fees, and other fees if you do not manage them well. As long as you pay your balance on time and in full, you will avoid all interest and fees. That’s how you can keep it a monthly interest-free loan (sort of). Today, people use credit cards because they are safe, secure, and more convenient than any other method of payment. But people tend to overspend when using their credit cards, spending beyond their means and losing track of how much they spend. There are tools you can use to help you track your credit card purchases, by logging on to your online account often and using finance tools like Credit karma and Mint. 

The best way to avoid overspending is to not buy unless you can afford it. We all have necessities we need to buy, but most Americans are overspending their credit cards and buying unnecessary things. They are losing sight of saving, because they are constantly spending. That is why it is important to monitor your bank and credit card accounts. Buy it when you have or “will” have the money for it from your next paycheck, or simply save enough money to back it up! My old English professor always says, “If you can’t back it up with evidence, you can’t support your argument,” therefore, making your reasoning invalid. You can’t use words like “just because” to support your biased opinion. It is simply not enough. Likewise, with credit cards, you have to back up all your purchases. If you can’t back it up, you are setting yourself into a debt trap. Just think of a credit card purchase as every other purchase you make. You are making a commitment to pay it back in full within a payment period. That way, you’ll be able to pay it all off when the bill is due.

Shop With Credit Cards

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One of the best ways to take advantage of your credit card is shopping with it! Obviously shopping with good judgement (not recklessly).

According to YouGov, 67% of consumers uses cash as their form of payment in-stores. Cash is certainly king, but when it comes to reaping rewards and benefits, credit cards leads the way by a wide margin. Why? With cash purchases you don't earn any rebates at all and it doesn't come with any benefits other than perhaps getting an exclusive discounts from mom and pop shops, but most retails offer the same price utilizing either payment method, especially big retailers and merchants. With credit card purchases if the retail does not accept returns, your credit card services can offer you a refund if it is eligible. Not to mention that most reward credit cards rebate their consumers 1% cashback for every single purchase. Few cashbacks credit cards can go as far as 5% cashback on selective merchant and products!

Imagine all the purchases you made at the end of this year and just take 1% of that total amount. It would be significant. According to U.S. Bureau of Labor Statistics (BLS), the average consumer spends $77,280 annually. 1% of that is roughly $773. But fewer people are taking a bigger bite of that amount by utilizing bigger cashback rewards and other incentives. Regardless if you are taking a big bite or a small bite, it's something back in your pocket. Would you rather have nada or $773?

Published By: Dethcon   Updated on January 27, 2025