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A few weeks ago, I wrote about some increased offers on the Chase Southwest Rapid Rewards cards. I shared the post in a few local Facebook groups I belong to that allow business posts.
One social media reader commented: “Or you could not pay interest on every purchase you make and with that money just buy a plane ticket.”
I realized that not everyone lives and breathes credit cards like I do. Some people fear credit cards or are misinformed about how they work.
Why Credit Cards Aren’t Evil
Dave Ramsey, the personal finance guru, hates credit cards. He thinks they are evil tools of consumer debt. I’m a big fan of Dave Ramsey, and he’s not completely wrong. Many folks cannot handle themselves around credit cards. They spend more than they can afford to pay off, so they end up paying interest charges.
However, credit cards don’t have to be evil instruments of debt. Most major credit cards have a payoff grace period of 20-25 days. If you pay your statement balance in full by that due date, you don’t pay any interest or fees. It’s like a 0% loan. If your credit card has travel rewards, you accumulate miles or points for just buying things that you pay for a month after you purchase them.
You Need Discipline and Organization
Credit card companies are counting on you to screw up. They are banking on you becoming envious of your neighbor’s new gadgets and buying them for yourself, even though you may not be able to fit the cost into your currently monthly budget. Credit card companies are counting on you to be impulsive shoppers who cannot pay off their balances in full each month.
But, if you want to succeed in this miles and points travel hobby, you have to be smarter than the credit card companies. You have to have the discipline to only charge what you can afford. You have to stay organized to know what’s in your monthly budget and the timing of your monthly payment due dates.
Honestly, the interest rates on credit cards that earn miles and points are not good. They are terrible. But, you must make them irrelevant by being responsible with your purchases. If you pay off your balances in full, the interest rate doesn’t matter.
I feel like I repeat myself on this blog a lot with this advice, but I’ll say it again: Pay off your credit cards in full each month. Then, you can accumulate miles and points from credit cards guilt-free and travel farther and more frequently than you would if you had to pay cash for everything.
Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
Nancy lives near Dallas, Texas, with her husband and three kids. Her favorite vacations include the beach, cruising and everything Disney.