Forum Thread

Using Credit Cards over Debit Cards for Rewards


Reply to ThreadDisplaying 4 Posts
  • Are you sure you want to delete this post?
        

    Been doing this the last few years, using credit cards instead of my debit card for all my daily and monthly purchases, and then just paying off the balance before the bill is due to avoid any interest. Works out great for gaining credit card rewards, if you have a card that gives you points or cash back.

    And makes it a little safer to do transactions because if fraud happens on a CC it's not immediately pulled out of your bank acct, for you to fight to get back. It just shows on your cc account and you call and remove it before the bill goes through if you setup alerts.

    Anyone else do this? Only problem I have is Wells Fargo has checking account requirements on my debit card, so if I don't carry X amount of money in my checking, or use my card X number of times they charge me a service fee. Which is ridiculous, they know I don't want to use their card over another option that gives me money back for using it so they penalize me for it.

  • Are you sure you want to delete this post?
        

    I agree this is a great way to build your credit, but it's also a way many people get into trouble before they even realize it if they don't (or aren't able to) pay off the balance each month. I got into a lot of credit card trouble in my 20's and shied away from using them even after paying off all my balances in my early 30's. It took me getting married to someone who has always been smart with her money to convince me that paying for (most) purchases with our credit card was a great way to really build my credit.

    It's amazing how quickly I turned a so-so credit rating to getting to and staying above 800 for the past few years.

  • Are you sure you want to delete this post?
        
    Old Sport Wrote:

    I agree this is a great way to build your credit, but it's also a way many people get into trouble before they even realize it if they don't (or aren't able to) pay off the balance each month. I got into a lot of credit card trouble in my 20's and shied away from using them even after paying off all my balances in my early 30's. It took me getting married to someone who has always been smart with her money to convince me that paying for (most) purchases with our credit card was a great way to really build my credit.

    It's amazing how quickly I turned a so-so credit rating to getting to and staying above 800 for the past few years.

    Gotcha. It can be a slippery slope if you aren't mindful. I'm not suggesting to do this to build credit though. Only that if you have a credit card that gives you cash back reward points or travel rewards or whatever, its worthwhile to use that card instead of your debit card, on things like groceries for example, as long as you immediately pay that credit card off afterwards.

    I earn like $100 - $200 in cash back every 6 months to a year from a CC doing it this way. For reference, many cash back rewards credit cards give you 1-3% back, depending on the type of purchase. My main one gives me 1.5% cash back on all purchases.

    There is an extra step involved, you have to pay the balance off with your bank acct after you use the card before the card hits you with interest. But you can also set your credit card to automatically pay off your full balance when its due every month to avoid that too.

  • Are you sure you want to delete this post?
        
    This works. Just have to stay on top of your finances. Also like the feeling of only getting something from the credit card companies and not giving them what they really want which is interest payments.