By Emily Landsiedel
I came to the realization this year that I’m wasting money by using a debit card. When I spend my money using a debit card, I get nothing in return, yet if I use a credit card, I’m reimbursed for money I was already planning on spending. I don’t think I will ever go back. I understand that credit cards are not for everyone, and I do not advocate them for someone who runs the risk of using credit cards to buy things they can’t afford or plans to only pay the minimum each month. However, if you can see your credit card the exact same way you see your debit card- just an extension of your current bank account- and you pay off your balance in full every month, they are clearly the better option. Peter and I have already booked both our tickets to Mexico and Peru using the miles we earned this year and we still have $500 more to spend on flights.
Sign Up Bonuses Make the Difference
Over the course of the year, Peter and I chose to sign up for a few travel credit cards because they offer sign up bonuses that can get you a $400-$600 plane ticket if you spend a certain amount in the first three months. Peter and I never spent money just to reach the bonus. Instead, we switched our credit card out for our debit card on every purchase we made from groceries to gas. Since we were both on the same account, we reached the spending quota easily. You should not have to spend anything extra to get these bonuses.
Choose Your Card Wisely
We were also very careful about what cards we chose because different travel credit cards are good for different people. For instance, when we were trying to save money and not eating out much, Chase Sapphire Preferred was not a good fit for us because it gives twice the points for eating out. Yet, now that we are leaving to embark on this trip where we’ll be spending on travel constantly, that card is the perfect fit. Another good card for us was Citi Thank You Premier Card because it gives you three times the points on gas, and since Peter and I are long distance, we spend more money on gas than probably any other expense. Barclaycard Arrival Plus is another one that came highly recommended in my research for someone on a budget. All of these do have a yearly fee of about $95 (that’s waived the first year) if that’s an issue for anyone. Although in my opinion, the savings outweigh the cost as long as you limit yourself to one or two.
Best Exchange Rate Option
I’ve also found out that using a travel credit card abroad (with no foreign transaction fees) gets us the best exchange rate of any other option. Second best is pulling money from your bank account using an ATM in a foreign country, and third best is going to a bank and having them exchange the money for you.
Credit Card Myths
We’ve been taught to believe that opening credit cards hurts our credit score, but I can tell you from experience that as long as you wait at least three months before signing up for a new card, it has a very minimal, if any, effect on your score.
In conclusion, if used responsibly, credit cards are not the financial bugaboo they’re made out to be. They can strengthen your spending and be an asset, rather than a liability.