Using your credit card for everything is a great way to find yourself deeply in debt. It's (intentionally!) easy to overspend when using a credit card, and end up carrying a balance.
Also many people (like me) don't have good enough credit to get a fancy-pants 2% back credit card.
I personally use a Simple card for spending and only transfer spending money to it weekly - helps keep spending in check and limits my losses if it were lost / stolen. I've been using a method like that for several years and avoiding credit cards as much as possible and I'm now very close to being completely out of debt, which never would have happened if I continued to rely on my own self-will to not overspend on a credit card.
> Using your credit card for everything is a great way to find yourself deeply in debt. It's (intentionally!) easy to overspend when using a credit card, and end up carrying a balance.
The first rule of using credit cards for fun and profit is to never carry a balance. Ever.
Now, there is an exception to this rule, on the following conditions (all must apply):
1. You do not pay any interest (yes, possible, many cards have promotions, especially store/brand cards)
2. The purchase is for a very long-term item, like major electronic appliance or a alike, that you will be using for several years at least.
3. Due to some circumstances you couldn't foresee you could not save for the purchase upfront and you absolutely need it right now - e.g., you refrigerator suddenly died and you need a new one ASAP.
4. You know and calculated the monthly payment which allows you to pay off the whole sum in a year or less (and of course before promotional no-interest period expires), and this monthly payment is less than what you would be able to save if (3) did not apply. If this rule is not true, you can not afford it, look for a cheaper alternative. Also, never pay just a minimum payment, this is a trap.
Credit card balance is a loan, and these rules are a way to make it into a cheap loan. But be careful - it's like a can of gasoline, can be very handy to get you into places you want to be if you handle it right, but handle it wrong and you can end up badly burned or worse.
If you follow these rules, you can use credit card with relative safety, as even if you overspend one month, you'll have to cut back next month to pay for it. Also improves your credit score :) But if you notice you can't use it without carrying a balance - don't use it at all.
I don't know if (1) is strictly necessary in the context of (3). But then:
5. You refrain from further transactions with that card, since your grace period is gone and new purchases will immediately accrue interest.
(Although I suppose you could operate in an different paradigm where you make payments as frequently as possible with most all of your spending money, and then new purchases on the card are just effectively taking away from that payment)
In theory, yes, even non-zero-interest loan can be good. In practice, I'd rather not bother given how easy it is to make a mistake and end up overpaying massively because you failed to read some fine print or account for some obscure rule of how purchases combine and accrue interest. Zero is easy. Non-zero is complex and you are not in the position of advantage there as they know their rules much better than you, so in most cases it's not worth it. You can do it right if you have the knowledge, but then surely advice from some random guy on the internet is not going to change your opinion anyway :)
I completely agree. I just wanted to highlight a major one of those traps that can get you if you do start carrying a balance. Doing so should only ever be out of complete necessity, so whether you can get an interest-free offer seems somewhat beside the point.
FWIW it feels like the additional complexity of those offers coupled with the relaxing of standard payment behavior is a great way to trip people up.
> But if you notice you can't use it without carrying a balance - don't use it at all.
That was literally my entire point :-)
I have no doubt that many people have this figured out, but my point is that 'use your credit card for everything always' isn't necessarily good advice for everyone.
Personally, not having things like Simple around for the ~20 years I've been living on my own, I already have a system of budgeting (Python+SQLite for the last few years) and zero impulse buying habits outside a greasy lunch from my favorite food cart now and then.
So for me, putting mortgage, utils, and food on the CC and pay it off with my first check of the month works just fine. And I don't have to switch financial providers.
Especially hesitant seeing they're owned by a multinational bank with a dubious history. My local CU seems much more approachable and personable, despite Simple's trendy "human" branding.
Using your credit card for everything is a great way to find yourself deeply in debt. It's (intentionally!) easy to overspend when using a credit card, and end up carrying a balance.
This is why I have a second checking account that I transfer money to from my primary checking every few days to match the current credit card balance. That way, my primary checking always contains money free of credit card obligation. (Obviously, I then pay off the statement balance from this account every month.)
Also many people (like me) don't have good enough credit to get a fancy-pants 2% back credit card.
I personally use a Simple card for spending and only transfer spending money to it weekly - helps keep spending in check and limits my losses if it were lost / stolen. I've been using a method like that for several years and avoiding credit cards as much as possible and I'm now very close to being completely out of debt, which never would have happened if I continued to rely on my own self-will to not overspend on a credit card.