Purchase with or without a credit card?

By Stew


Last week, Mike wrote about some ways to use a day-to-day credit card. Most Gather Little by Little readers might have been a little surprised by the topic and the point of view because glblguy has always been completely averse to credit cards – and for good reason.

While I share all of glbl’s reservations about using plastic, we find it almost impossible to avoid “swiping” for at least some of our purchases. It is true that we had to learn our lesson the hard way. Credit cards allowed Mrs. Stew and I to spend far more than we could afford in our early years of marriage and we are still suffering some of the effects today. There was also a time period where we did not use our credit cards at all. Shortly after that, we had almost three dozen active cards between us . . . but that’s a story for another day.

We now use only one credit card and only for specific purchases. It is a rewards card, in fact, the rewards are so good that the company has since stopped issuing this particular card, even though they honor our original agreement. We typically earn $300 to $400 in cash back per year and for the last three years, we have done a good job of controlling our spending so that our credit card has worked for us and not against us. FYI, due to where we live in relation to the rest of our family, we are considering a switch to a airline credit card in order to earn free flights.

We do not use credit cards for the following:

We learned early on that it was a bad idea to use our credit card for groceries – especially me. There is just something about a grocery store that convinces a person to spend more than necessary. I mean, who cannot use more food? The combination of stomach pressure and credit card enabling caused us to get into trouble. When we started using a credit card again, we made the decision that groceries were a “cash only” purchase.

Clothes, again, credit cards can be better salespeople than the actual salespeople. And store brand credit cards can be the worst because they always have such great deals for people who use the credit card backed by that company. Clothes are off-limits.

We do use our credit card for the following:

Gasoline is a necessity that there is no getting around and it so happens that our particular card offers the highest rewards for gasoline purchases. I do not believe that using cash would reduce our monthly fuel bill at all.

My job requires me to have a moblie phone and my wife also has her own phone. We do not have a household landline. Our wireless bill every month is charged to our credit card. This bill earns rewards and saves me from having to schedule another bill on time.

This last category might sound like a potential pitfall: we use our card when we go out to eat. There is great temptation to spend more than we can afford when using a card in this scenario. There is also greater pressure to go out to eat more often because of the card’s enabling. However, so far, it has not been a problem. My wife works a great deal and I like to give her at least one meal “off” a week. There are times when I give her a break by cooking a meal at home myself, but it turns out that there are only so many times that a family will endure scrambled eggs and Mrs. Stew can never find the cooking utensils after I use them.

There are other things that we put on the card, but most of these are incidental, though planned purchases, such as doctor visits, contacts/eyeglasses and airplane flights. I keep a sharp eye on our credit card purchases and there has never been a month where we did not pay off our balance in full. That said, I respect who do not use credit at all and encourage most people to avoid plastic as much as possible. – Article by Stew

Photo by Brave New Films

11 Responses (including trackbacks) to “Purchase with or without a credit card?”

  1. Miranda Says:

    I think you make a good point about responsible credit card use. If you work it into your plan and your budget, a credit card can be a great tool. But you have to be careful to make sure it is part of an overall plan.

  2. Mike Says:

    Interesting point of view. However, think you may run into more trouble spending at the restaurant than at the grocery store. A good bottle of wine is so easily added to a nice meal ;-)

    Overall, I think that once you have learned to master your urge to buy, you can make a lot of money by paying with your cards for regular purchase such as gas and phone.

  3. Carrie Says:

    Good article. We charge everything on 2 credit cards to get the rewards and then pay off the balances in full each month. We could pay off the purchases as they are incurred, but I love getting 30+ days of float.

  4. Gholmes Says:

    Glbl didnt only have “reservations” about using credit cards he was emphatic of NOT using credit cards.

    As far as rewards that is just marketing gimicks from the lenders. Same lenders who are unregulated and change the rules mid stream. I am with glbl on this NO on using credit cards and my life has been much simpler not having another bill to juggle.

  5. Craig Says:

    I use my credit card with some subscription bills like the gym and netflix. for the most part I try to use debit more but for more expensive purchases I may use CC just to have time to save money for it. I always pay off in full though.

  6. Kristia Says:

    My husband and I do not use credit cards either. We either pay with cash or bankcard. For years we struggled with financial discipline. Once we got rid of credit cards, I’ve never looked back. Rewards are good, but “peace” is priceless.

  7. DDFD at DivorcedDadFrugalDad.com Says:

    Nice post!

    I would add– Credit card or no credit card, NEVER GROCERY SHOP HUNGRY!