Picking the Right Credit Card

I have decided to give my usual Sunday Special post a miss this week and write about something eIse that has been on my mind lately. A credit card!

I have currently got two credit cards: one is a foreign credit card that is closed with an outstanding balance that still needs to be settled (work in progress) and one active UK credit card with a £300 limit that is paid off in full. Since my first credit card is closed, naturally I am only able to use my second credit card. I took it out last year (with a higher credit limit, but paid it off and lowered my credit limit since then), and use it mainly for its rewards. I initially received 5000 bonus points when I signed up for the card; it converted to £25 worth of vouchers, and I have since accumulated more points. Basically, I use my credit card to pay for all my purchases, and every £1 spent gives me a set amount of points. I have had this card for less than a year and so far I have received £80 worth of vouchers. I can’t say that I have always used the card to collect points as there was a time not so long ago when it was maxed out, however £80 worth of vouchers in rewards is still pretty good.

It got me thinking about the benefits that I can get if I use my credit card correctly. A credit card is a powerful tool that can work to your advantage. You can actually use it to make money! I redeemed some points last week and received £20 worth of Sainsbury’s vouchers yesterday. It’s like money in my pocket! To get this “money”, I haven’t worked extra hard, I simply used my credit card to pay with instead of cash or a debit card. I would say it takes me around 2 months to collect enough points to redeem for a £20 voucher. I normally order Sainsbury’s or M&S vouchers, but there are many more suppliers to choose from. You can also redeem your points to pay for your flight with selected airlines, hotel stays, experiences such as a visit to the London Zoo and much more! I prefer rewards to cash back as I find that points are faster to accumulate and for every £10 in cash back I can get £20 worth of vouchers!

I’ve done some research and found out that there are so many great offers out there. The best part is that when you first sign up, you get a bonus! I have found one credit card that gives you £30 worth of vouchers of your choice with your first spend of £300 in the first 3 months. Easy, especially now that I have some of my trips coming up. I am now considering closing my current credit card and signing up for a new one with a low credit limit. I need a credit card anyway since I am travelling more or less on a regular basis. Why not get some free stuff along the way! I have heard of people who open up one credit card, collect their rewards and then apply for a new credit card and do exactly the same, and so on. I am not sure if this is something I will be interested in (as this can easily lower my credit score and is a bit of hassle), however, since I am looking for a new credit card anyway (my current credit card provider charges me interest if I use my credit card abroad and this is something I am not happy with) I might as well get the one that I can benefit from. It goes without saying but I thought I’d make it clear just in case: I will not use a credit card to my disadvantage ever again and if I ever use a credit card again, I will make sure I get some sort of benefit out of it! The more, the better!

Do you use a credit card with rewards? Do you use any credit card? Would you consider using a credit card with rewards?

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  1. We churn credit cards in our house, with both my wife and I gathering sign up bonuses and then cancelling, and moving to the next. We’ve yet to see any impacts to our credit scores, but as we’re so debt averse our credit scores won’t impact us much in any case.

    We’re currently churning the Starwood Amex, getting about 60,000 points total (enough for 1 week at a fancy international hotel, or 2 weeks at a basic hotel).
    Done by Forty recently posted…Do Credit Cards Actually Increase Spending?My Profile

  2. I’m a huge supporter of credit cards with rewards. Like you, I have made some great cashback, received free flights and hotels and all kinds of other rewards from credit cards and loyalty cards and have never paid a penny interest.

    Its just important to make sure people use them the right way.

    A awesome sharp knife is brilliant for cutting meat. However, used the wrong way, its pretty darn dangerous!!
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  3. I think it’s a great idea to use credit cards for rewards if you can be disciplined enough to do that and not overspend on them! We don’t use them at the moment at all (we’ve been seriously put off!) – however when we become debt free then we may use them to our advantage in this way!

    I know a few people who put all of their living costs onto credit cards and then pay them off at the end of the month before the interest accumulates. It’s really good for building credit scores up I think.
    Hayley @ A Disease Called Debt recently posted…Keep Calm and Carry On! Part 1My Profile

    1. I know what you mean, Hayley. You have to do what you feel is right for you. I may not have trusted myself with a credit card for a month or two since I embarked on my debt payoff journey, but I know now that I can use a credit card to my advantage. I pay it off every week, just to be sure and not leave it for too long as I don’t like to know that I “owe” money to them!!
      Eva @ Girl Counting Pennies recently posted…Picking the Right Credit CardMy Profile

  4. We don’t use credit cards right now (there aren’t good reward ones and we don’t like the hassle anyway). All accounts are on zero overdraft and we use debit cards. We do miss on some cashback, but it’s OK, it helps us be more organized with the money/spending.
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  5. I mostly just use my present one that gives me higher rewards on gas and groceries, which I then pay off. I haven’t done any churning yet, but it looks like a smart move to reap some pretty sweet rewards!
    anna recently posted…Weekend RetreatMy Profile

  6. I wish Canadian credit cards had better rewards to benefit from. I have a cash-back one and even though I still have student loan debt, I have no problem using my credit card for the majority of my purchases so I get cash-back. It’s free money afterall! And like you, I am confident that I will never slip down that consumer debt slope again. I mean I have my blog to stay accountable for 😉
    Girl Meets Debt recently posted…I Deleted My FacebookMy Profile

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