Home > Why Using a Credit Card Saves Me Money

Why Using a Credit Card Saves Me Money

May 27th, 2008 at 06:18 am

Each of us seeks to manage our finances in the best, most effective way that works for us. For some, like Ima Saver and Pennywise Meanderings, using cash and envelopes is a successful system for paying bills. For me, it is using a credit card. However, the key is that I use my CC to save money as I will discuss later, and I always pay it in full each month to avoid finance charges. My method requires discipline, both to carefully monitor expenses (I use Quicken) and to charge only what I will pay in full each month.

There was a time I had credit card debt… I was a single mom and emergencies happened that depleted my emergency fund (auto, medical, etc.). I paid as much as possible each month until I was debt free. About fifteen years ago, when DD1 moved out of state for college (and never moved back), I started using a credit card primarily to buy airline tickets to visit her. It was convenient to purchase the tickets with a CC (back then, it was over the phone and now, it’s online). Another “benefit” is that the CC company I use provides life-insurance in case of a plane crash (hey, you never know…).

Now, still debt-free (except for a small mortgage), I pay for EVERYTING I can with a credit card. Why? Because I like to use my reward miles (that never expire, BTW) to save money. For example:
~ DH and took a great vacation to France in 2004 with free tickets ($2,100 saved)
~ We are going to NYC this summer with free tickets ($1052 saved)
~ We visit DD1 and DD2 several times a year, and our airfare is usually purchased or reduced using reward miles. (Savings > $1,000 annually)

I use the CC to pay for routine expenses that I’d normally pay by check or ATM card:
~ Utility bills
~ Phone and Internet
~ Prescriptions and medical co-pays
~ Vet bills
~ Groceries
~ Gas/auto expenses
~ Entertainment/ meals out
~ Insurance
~ HOA Dues
~ Donations
~ Personal care (e.g., haircuts)

I also use the CC to pay for periodic expenses such as auto maintenance, gifts, clothing, carpet cleaning, vacations, etc. and large planned purchases (new refrigerator, new carpets, shutters, etc.). However, I always write a check if there is a fee involved for paying with a CC (e.g., property taxes). The miles add up quickly.

Another advantage: I save time and $$ on stamps, because I pay only one bill online. The money used to pay the CC stays in my interest-earning savings account until I make a transfer to my checking account to cover the payment. So, this is the system that works for me, but I recommend it only for those disciplined enough to pay the account in full each month to avoid finance charges and remain debt-free.

2 Responses to “Why Using a Credit Card Saves Me Money”

  1. Blue Eyes Says:

    This method works best for me also. The rewards add up very quickly. I use very little cash.

  2. monkeymama Says:


    Now that pretty much everyone takes credit cards, we don't even carry cash anymore. (Always keep a little for emergency but have gone pretty cashless otherwise).

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