Using credit cards for everything has rewards, risks

It takes discipline to run as many monthly Expenditures as possible through a card
By Allie Johnson  |   Published: August 31, 2017

Finance WriterAward-winning author covering small business credit cards and consumer.

Some customers use their credit cards for everything from a refrigerator that is new and pay the bill in full each
Month and reap rewards. But without the proper controls in place, you
Could find yourself loaded down with more debt than rewards points.
If you are disciplined, running as monthly
Expenses can pay off big time.  
But charging every possible buy can backfire for cardholders who are new to budgeting, have little or who are not in
A habit of keeping their charging.
Considering charging? Receive a systemIf you do cycle all purchases through a credit card
Are thinking about doing so, do you have a system to keep track of your spending
to keep from overspending?
Technology allows us to monitor checking and savings account balances online. However, credit card bills are monthly events. You need to put in place a system to reconcile those often, and to track where it’s going out and when the cash is coming in.
Spending today with a plan
Tomorrow can muck up your cash management, says a certified, Pam Horack
Financial planner also called “Your Financial Mom.”
If all expenses run through a
Card, she says, “You are always one month behind on your finances.” When you
Log into your checking or savings accounts, you might get tricked into believing you have
“extra” money when it’s actually already spent because you owe it to the credit
card company.
Using credit in the store also makes it easier to invest more
Says William Davis, a certified financial planner in JRB
Wealth Management. “Credit cards enable and encourage individuals to overspend,” he
Spending by credit card dulls the
Pain of parting with cash say. 1 study found consumers were willing to spend
$175 when using a card, to throw a party that is hypothetical, but when paying
with cash. Research also shows grocery shoppers are more
Likely to make impulse buys.
“I record every penny spent, found or made in a variety of
categories. I know if I’m spending
Making, and can correct.”
Drill it in your head: Do not pursue rewards with spending that is unnecessary. Spending so much you find yourself paying interest or late payment fees is a loser’s game.
Moving all-credit is bad if: It’s probably a bad idea to start putting all
Your expenses on credit
You are a budgeting newbie.
“People just starting a budget likely need to be very aware of what
They’re spending,” says fiscal psychologist and author Kit Yarrow.
You slip up
Repeatedly with money. Anybody who seems to have more month than
All expenses shouldn’t run through credit. “If you are missing the mark
Frequently, you shouldn’t be doing this,” Yarrow states.
You have a credit limit. If you’re new to charge or are currently rebuilding your
Credit, and have only one or two cards with credit limits that are low, charging
Everything can lead to maxed-out cards. Your credit scores can be dragged down by that.
You carry
a balance. The key to successfully putting everything on credit is to pay
off the balance in full every month, no exceptions. If you don’t do it
At this time, you won’t pay in full when your bill is even larger.
Another word of warning: Some credit card users begin with the best
Intentions, even setting up an automatic payment from their checking accounts to
Verify monthly, the invoice is paid in full, Davis says.  
“They then stop the automatic payment and begin to slowly
Allow the balance creep up,” he says. “Before you know it, they have $10,000 or
$20,000 in credit card debt.”
The way the pros do itIf you are ready to make the switch from debit without
Ending up in debt, follow these five tips:
1.  Stick to
a budget.  Make sure you have a budget and have demonstrated an ability to spend
You earn.
For example, Marcia Noyes
Braunfels, Texas, has been putting everything on credit for years. She faithfully to track her expenses
uses a spreadsheet.
“I record every penny spent, found or made in a variety of
categories,” Noyes says. “At all times, I know if I’m spending more than I’m
Making, and can correct.”
2.  Treat credit more like money. Take steps
Yarrow states to remind yourself that you are spending money.
If you’re
Old-fashioned, put a sticky note on your card
That month spendrecord each purchase and subtract from the total. Or use an app such as Debitize, which sets aside that money, subtracts your daily credit spend from the accounts and pays your credit card bill in full at the end of this
3.  Check automatic payments frequently. When
You put everything it’s easy to forget about obligations for services
Or subscriptions you need.
Review automatic
Payments run through your card at least yearly. “Think about whether you really
Need those channels or use all that data,” says Yarrow.
4.  Watch for card surcharges.  Some service providers may add a credit card convenience fee to your bill that cancels out any rewards. In these cases, it might be best to
write a check.
5.  Keep an eye.
Based on when your card company reports to the credit bureaus, it can look
Like you are carrying a balance even when you’re paying your bill in full
each month.
It’s sensible to keep your credit use as low as possible. If necessary, you can keep your balance
From the target range by making multiple, even weekly,      payments each month, she
The bottom line: Putting everything on a card can be
Rewarding, but it works
card use.
See related: Side gig can be best debt-payoff option! Podcast: Obtain a life

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