When it comes to credit cards and understanding how they work it’s important to remember this golden rule “Use your credit cards don’t let them use you”. I say this because often when we apply for credit we fail to do the necessary research or seek out the long-term benefits of the inquiry.
Lets Talk About The Benefits
Personally, what I like to do is find credit cards that align with my everyday life or spending habits. I like to travel, so I focus on cards that have the best rewards and points systems that will help me pay for my vacations. One card, in particular, would be the Chase Sapphire, not only does it have great cash back rewards but points are worth 25% more when you use them for flights/hotel. The first time I used my points for vacation is when I traveled to Paris for my 25th birthday the total ticket came out to about $350. I was like WOW I couldn’t believe I had just gotten a free ticket overseas just for using my credit card. This is when I discovered that if you use your credit cards responsibly they will actually treat you very well.
Don’t Judge Me!
Another one of my personal favorites, is the American Express Platinum card. Now I know what your thinking like isn’t the annual fee expensive? Yes, it is. However, the free Global Entry/TSA Pre-check, Unlimited access to airport lounges and $200 cash back makes it worth it for me. In 2018 alone, I probably drank about 10k worth of scotch in the airport lounges and saved more than 24hrs skipping through crowds and check-ins with global entry. Therefore, it makes sense, in my opinion, to have the card and pay the annual fee. The benefits are that I am able to save time in the airport and enjoy my favorite cocktails for free while being able to network with potential clients. In addition to that, I am able to take advantage of these perks simply because I use the card to pay my bills and then I pay it off. I am using the credit card company! I am getting all of the benefits and perks of their memberships and they aren’t getting a damn thing in return.
How Can The Card Companies Use Me?
I know you’re probably thinking like uh what do credit card companies usually want in return anyway? The answer is interest and I mean lots of it. Credit card companies thrive off of consumers bad habits and instant gratitude. They trick you into overpaying for things by the thousands of dollars in high interest or even worse spending money you don’t have. This is how you can end up being USED.
The thought of all these cool perks and cash-back rewards encourage you to apply for a credit card. However, because of bad spending habits and a lack of discipline, you end up maxing out a card. This typical scenario often happens and leads to you being USED by the credit card companies. Now that the card is maxed out you’re paying high-interest payments every month, your credit score is negatively impacted and you’re robbing Peter to pay Paul. This is something that you want to avoid at all costs when possible and also why most people despise credit cards. I’ve heard tons of horror stories and have had people tell me about their past experiences with credit cards gone wrong.
Let’s sum it up
Its ok to spend money on your credit card that you HAVE in the bank but it’s not ok to spend money you don’t have. That is the recipe for ultimate disaster. Keep it simple , think of credit as a game of chess. Be strategic with every credit inquiry you make and think about the long term benefits when opening another account. NEVER use credit cards for emergencies save up an emergency fund! Use your credit for reward points and incentives that is all! If you follow these rules you my friend will NEVER and I mean EVER be used by the credit card companies!
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