Exactly. We've put almost $50K on our credit card already this year and have never carried a balance.
We have a rewards card and we use our card strictly out of convenience. We use it to pay every bill that we can and use it on every purchase we can. At the end of the month, we pay it off. I consider a credit card transaction the same as paying with a check or ATM card and instantly deduct that amount of my check book (yes I still balance a check book).
At the end of November, I will cash in my points, probably about $55K in points and get a nice check for $550 to put towards Christmas. This along with the money we put away every month for Christmas will mean almost no out of pocked expenses for the holidays.
So for me, my credit card does 2 things. 1) It pays me 1% on all my purchases and 5% on certain ones and 2) It makes paying my bills so much easier. Everything is set to direct withdrawl from my credit card and I just make one payment at the end of the month (the only thing I can't pay are my mortgage and my car payment).
Also, if you have not established a solid credit history, it's a good idea to sign up for a card and make a few regular purchases every month on it and if you get a low rate card, it will actually help your score to carry a small balance and make regular payments on it (a solid payment history is the most important part of your credit score).
If you are an impulse buyer, I would shy away or at least ask for a small credit line (like $500-$1,000) to start with to prevent yourself from getting in to too much trouble. And then as you get the hang of making purchases and paying off your card and you start to make more money and incurr more expenses then increase that limit.
Building a credit history will get you a solid credit score, which will save you tons of money in the long run. A high score = low rates, which will save you thousands of dollars when you go to buy a house or a car.
As far as what card to use, it's tough to say. There are rewards for almost everything these days, so if you travel a lot of go to sporting events, etc. there are all sort of cards that are geared toward those things.
My advice, get the one with the best cash back rewards program. All the free flights and crap you get are way over priced and you'd likely be better off getting cash back and booking the flight by yourself and would probably have some cash left over.
We just got switched to the Chase Freedom card. It's 1% back on all purchases, but every quarter they offer 5% back on certain categories. So in Q4, we get 5% back on all grocery stores, department strores and movie theatres.
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