Credit Cards Aren't All Bad

It seems that every time you read a money management article, it is always stressing the idea of giving up all your credit cards.  I agree with this in theory.  If you had no credit cards, it would be a lot harder to go into debt.  However, living with not a single credit card is a very difficult thing to do in today's society.  Credit cards help build good credit.  Also, some things you just cannot buy without a credit card.  So the next question would be, how many credit cards should I have and which ones?


The answer, unfortunately, is not that easy to answer, so I will just give a little background into what I have found to work for me and my family.  Please note that the following recommendations are based on my unique financial situation.  You may find that others work much better for you and you family.  My whole point is to just get you to start thinking a little differently about how you manage your finances.


Now back to the story...
I have had a variety of different credit cards in my life and probably have researched more than I care to admit.  However, I've found that I've stuck with the cards that give me something of real value in return for using them.  I will get back to what I mean of "real value" in a second.  Besides choosing which cards work best for me, I also decided on keeping the number of cards I carry to a minimum.  This means that I have a total of two credit cards and I pay them off in full each and every month.  Not only does this help improve my credit, but it insures that my credit cards keep working for me instead of me working for my credit cards.


Credit Cards Vs. Store Credit Cards
When I say that I have two credit cards, this means that I have one what I call just a credit card and one "store" credit card.  The store credit card can only be used only at that particular store.  Now, in general, I don't really agree to having any store credit cards at all.  They usually have high APR's and a lot of strings attached.  Plus, I feel like every store you go into, you are being pressured to sign up for their store card to "Save 5% on today's purchase".  That's really great until you realize that the 5% you just saved doesn't really justify what that card may do to your credit score.  According to the Experian website, "Having too many credit cards with either high balances or large amounts of credit available can negatively impact risk scores, depending on the overall credit history." 


The only store credit card I carry is through Kohls.  The reason for this is simple.  I shop there frequently, and they send me lots of great coupons.  The only regular credit card I carry is through Discover.  The reason for this is also very simple.  I love their cashback feature.


Real Value
Now for the fun part...real value.  This part gets me really excited because it makes boring credit cards fun and exciting!  Let's first talk about the real value I get from using my Kohls card.  Probably once a week I receive coupons in the mail from Kohls just because I'm a card carrier.  These coupons are always 15%-30% everything coupons.  In addition to these coupons, they also have Kohls cash.  At designated times, when you spend $50 you get $10 in Kohls cash to spend at a future visit.  I cannot even begin to tell you how many times I've stacked these coupons with each other on sale items to receive some ridiculously awesome deals.


The real value I receive from using my Discover card only seems to get better as time goes on.  At first, I was thrilled about their cashback feature.  You get 5% cashback on certain items every few months and 1% on everything else.  Then they added an additional cashback feature called "ShopDiscover" where you can save even more if you link to a store's website through the Discover card website.  During the holiday season they increase the ShopDiscover cashback amount up to 20% on many of their retailers.  I recently bought a new refrigerator and saved 25% using this new feature.  This is because when you use ShopDiscover, you not only qualify for the designated retailer amount, which in my case was 20%, but you also qualify for the 5% cashback bonus or the 1% everything else bonus.  The latest new addition to my Discover cards real value is the ability to pay for items on Amazon with your cashback bonus.  It transfers to Amazon penny to penny.  Whereas you usually cannot redeem it until you have a minimum of $20 built up, with Amazon, you can use as little as a penny if that is all you have saved up.


My Point
When it comes to credit cards, remember to be smart and do your research.  Never sign up for a card at a cash register unless you have already researched the pros and cons of that particular card.  Also, take a good hard look at the cards you already own.  Are they bringing you any real value?  Or are they just a means to buy more stuff?  Credit cards aren't all bad, you just have to decide what cards are really working for you and what cards you are working fore.  Your credit score is now more important than ever in determining what you can do with your life.  Not only does it determine what rate you will receive on a car or home, but employers are also taking special note of it.  Take care of it and nurture it and it will return the favor ten fold. 


Thanks for reading!