If you’re not in debt, you should always use your credit card when it’s an option.
Having debt ≠ being in debt. If your net worth is positive, you are not in debt (even if you have a business loan).
This is as anti-Dave-Ramsey-type of advice as I can get. This blog is not for everyone.
Cash Back, Miles, and Points on Your Credit Card
Using a credit card gives you “free” points from the issuer.
Points Are Useless
Personally, I never do points (or even miles). I had points on a card years ago, but I did some napkin math and saw the amount of money I would spend to get points was nowhere worth what I could redeem those points for (mostly junk and the occasional interesting item like a GoPro).
Miles Makes Sense for Travelers
If my job involved traveling, I would definitely do SkyMiles for the simple reason that I would rack up a lot of miles anyway, so I could double down on those and use them for fun travel later.
In Real Life, Cash Makes the Most Sense
I don’t want to worry about points and miles, when they might expire, am I getting the best nickel-and-dimed deal on this flight, etc.
Just give me the cash.
Using Credit Cards for Big Purchases is a No Brainer
Buying a Car
If you’re buying a $50,000 car (and you’re getting something over 6,000 lbs so it’s tax-deductible) like a Range Rover, use a credit card—assuming your credit limit is high enough on the card.
If you have the cash to buy it outright anyway, I can’t imagine why you wouldn’t also be able to get a credit card that also allows you a credit limit that matches your cash in hand.
Some cards offer up to 2-5% cashback on purchases. 2% on $50,000 is $1,000.
Get yourself a free stack when you just use a card instead of writing a check.
Do you have an HSA, or will your insurance comp you if you pay the cost initially?
Use your card.
You pay a $1,000 bill, it gets paid anyway later, and you collect a couple of hundred bucks for your trouble.
It’s kind of wild you can put something like surgery on a credit card, but it’s a hidden opportunity (assuming your insurance won’t screw you over afterward—so approach this one with caution).
Say you do occasional (or a lot of) purchasing for your job—gas, plane tickets, inventory, etc.
If they offer a company card, but give you the option of using your own card and submitting receipts for comp, use your own card.
That’s literally free money from the cashback.
If Nothing Else, You’re Building Your Credit
Credit is great for buying getting loans for buying property or getting a business loan.
A crazy high credit score can lower your rates significantly.
So there is a real ROI from using credit cards if you ever plan on getting a loan later.
Don’t Fear The Card
Dave Ramsey tried very hard to poison the well of credit cards, but that’s because he was speaking mostly to children. His audience lacks self-control so they need to be talked to like he’s their dad.
If you’re a child and lack the ability to control your own spending, then yeah, don’t get a credit card.
If you’re a grown-ass adult who should be able to not spend more than they make, then definitely definitely definitely get a credit card and use it for any purchases you’re doing.