Credit Cards Aren't Evil

Credit cards aren't always evil, and can even help you if you use them all the time. I know just what you're thinking -- that goes against everything you have read online, or heard in person. While it is true that many people have gotten into financial trouble by spending beyond their means, this does not necessarily mean that a credit card is evil. Quite the contrary, actually.

There are actually a number of ways that a credit card can actually be beneficial to consumers, provided they use it wisely.

By regularly using and paying off a credit card you help build a good credit history. They key here is to try not to spend more than you can afford to pay back at the end of the month. If you run into situations where you do have to charge more than you can afford per month, try to pay as much as you can. A simple idea to help accomplish this is to make weekly payments to your card, rather than trying to wait until the end of the month. An even better idea is to log onto your credit card account's website a few days after you make a purchase with the card, and make the payment right then. That way the card is already paid off.

Use a credit card that offers cash back, or reward points. You can actually earn rewards the more you use your card. Try to pay as many of your monthly bills, as well as shopping purchases, with your credit card as you can. These are expenses you already pay, so you are only shifting the way you pay them. This not only allows you to maximize your reward/cash back, but it minimizes the number of transactions coming out of your bank account, thus reducing the chance for error when balancing your account.

In addition to cash back or rewards, some cards offer additional rewards for starting an online shopping purchase from their site. Next time you want to make a purchase online remember to check your credit card's website first, you might be eligible for additional rewards.

To maximize your rewards/cash back it is important to use only one credit card as your primary card, rather than a large handful of cards. I have actually started using my credit card for more and more purchases that I previously would have paid with cash, a debit card, or a check. Why?

The reward points that I earn, even on small transactions (which do add up over time). I now pay my car insurance, utility bill, and cell phone bill with my credit card so that I can earn reward points. I recently cashed in my rewards for a hotel I stayed in over the July 4th (2009) weekend.

By using this mentality you may be able to start building your rewards balance to start treating yourself. But be careful, it is easy to overspend when you aren't thinking.