Some financial experts say that credit cards are a valuable and vital part of good money management, while others say to get rid of them and don’t ever use them. Ultimately, there are no 100% right answers for everyone. For some people, credit cards are like alcohol to a severe alcoholic – they should just avoid them at all costs. For others, however, credit cards can be a healthy part of good money management. Having and using a credit card does not always have to add up to being in debt either. Here are three smart ways to have and use a credit card without carrying any debt.
1. Pay them off every month
There is no doubt that swiping a card is more convenient than carrying cash and many credit cards offer significant perks like airline miles and even cash back on purchases, which can save you money. Some credit cards offer a wide variety of perks that card users may not even be aware of. If you’re going to use a credit card, you might as well get the most out of it, so make sure you know all the benefits of using your card that your card issuer has to offer.
2. Save it for emergencies
While you may want to occasionally pay a bill or two with it just to keep your account active, it’s not a bad idea to keep a credit card in reserve for sudden, unexpected emergencies. This is particularly important when traveling, when you might not have the same access to your bank that you do at home. While online banking and ATM’s have made transferring funds and getting cash out-of-state or out of the country easier than ever, there are still limits to what you can withdraw and even transfers can take 24 hours or more. Having a credit card can make dealing with emergencies go much smoother.
3. Use it for business expenses
Many businesses require employees to buy or purchase things that they are later reimbursed for, particularly if they travel frequently. Using a credit card for these purchases means you get any travel points or rewards that your credit card offers, while your company reimburses you for the credit card bill each month. Having a single credit card dedicated specifically for business expenses also helps simplify the process of creating an expense report, not to mention preparing your taxes.
There are a wide variety of ways to manage credit responsibility without it sending you spiraling into debt. From free rental car insurance to airline miles to purchase protection, using a credit card can actually save you a great deal of money, which makes using a credit card a viable part of good fiscal responsibility.