There are benefits to using credit cards at times. Even though many people paying off debt don’t use credit cards, I have three cards in my wallet and use each of them in different circumstances.
Costco American Express
This is the card I’ve had the longest as it is the only credit card accepted at Costco. Since we sometimes make large purchases there, it made sense to put them on the card for extra purchase protection and benefits.
We use this card primarily for Costco purchases but also for two specific spending categories. This card pays 2% for travel and 3% for gasoline and restaurant purchases in the annual rebate. Yes, this is a cash rebate card. Why not get more money back?
Southwest Airlines Rapid Rewards Visa
When I’m buying domestic tickets, my preference is to fly Southwest Airlines whenever possible. The pricing, free checked luggage and no-fee changes are reasons for this loyalty.
For every $1200 spent, with the card, holders earn 1 airline credit. It takes 8 credits for a one-way ticket anywhere Southwest flies. This card does have an annual fee, so it wouldn’t be useful if you don’t use it enough to earn free tickets.
Twenty years ago I had several individual store cards. Now I have just one retailer charge card which for the Kohl’s store. Cardholders get additional discounts each month ranging from 15-30%. This, and free shipping codes, is on top of the standard sale prices.
I don’t carry revolving charges and wouldn’t advocate using credit cards if you are unable to regularly pay the bill in full. What you should do if make sure the cards you carry provide a benefit. I’ve canceled many cards over the year that no longer made sense for my goals and financial plan.
So, what’s in your wallet?
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