Everyday credit cards provide cardholders with price protection, cashback rewards, rental car insurance, and more excellent rewards. However, not all credit cards are great financial tools.
Credit cards are part of our everyday life. Americans are serving nearly $1 trillion worth of credit card debts. Consumers have to be cautious about conspicuous consumption and spending to avoid racking up interest charges.
Building an excellent credit profile requires using various credit sources, including credit cards.
What You Need to Do Before Applying for a Credit Card?
Credit cards can be excellent financial tools, but using credit also have its downsides. Too many credit cardholders run up debt and maintain a high balance that they can’t afford to pay back.
Cardholders have to do the following things before applying for an everyday credit card to take advantage of the benefits listed above fully.
The primary purpose of using a credit card for everyday purchases is to get a discount on things you are already spending money on, such as utilities, vacations, and more.
You have to start with a personal financial budget, an itemized summary of likely income and expenses for a given time.
Credit card is not evil, but they can ruin your financial life if you cant avoid impulsive shopping.
The goal here is to master your cash inflow and outflows and to have a good understanding of how much the household is spending on each spending category.
When you are comfortable with your budget and spending categories, apply for one of the everyday credit cards below and use it for each expense.
Everyday Credit Card: Wells Fargo Active Cash Credit Card
The Wells Fargo Active Cash Credit Card has no annual fee, and you earn $0.02 cash rewards for every $1 your spend on this credit card on the net purchase.
So, if your household spends $800 on groceries each month, you will get an automatic discount of 2% or a $16 cash reward which is enough to cover your Netflix bill. Over the year, you will earn $192 (($800 x12)x 2%) on your grocery bill alone.
Everyday Credit Card: Citi Double Cash Card
Citi Double Cash Card lets you earn $0.02 cash rewards as well. You earn 1% when a purchase is made and an additional 1% when paid for.
Like The Wells Fargo Active Cash Credit Card, there is no limit on the amount of cash back that you can earn.
Everyday Credit Card: SOFI Credit Card
SOFI Credit Card lets you earn 2% unlimited cash back, with a small and intelligent caveat. You have to redeem your cash reward to save, invest, or pay down an eligible SoFi loan.
The force saving and investing aspect of the SOFI Credit Card can be tangible. Here’s an example using the same hypothetical above family spending $9,600 ($800 x 12) per year on groceries.
By paying their groceries bill with an everyday credit card, the family can save or invest $196 each year. Those who think that $196 is not a lot of money have to consider that nearly 40% of Americans can’t cover a surprise $400 expense.
The Bottom Line,
Credit card is not evil. Consumers who spend their time drafting and mastering their personal finance budget and spending categories can save tremendously by putting their existing expenses on an everyday credit card.
