Reward Yourself

I never have any money. 

Not because I am broke - I just don’t carry cash anymore. I heard of an interesting concept a few years back where you use your credit card to pay for everything in order to collect reward points. It sounded intriguing so we thought we would give it a try.

It works!

The concept is simple.

Pay for absolutely EVERYTHING with your credit card. 

Then, when you get paid your regular paycheck, you pay off the credit card balance in full every month. By paying it off every month you accomplish a few things:

1. You don’t pay any interest

2. You earn reward points.

3. You don’t accumulate consumer debt.

Interest

Saving money on interest is awesome. Credit cards tend to charge REALLY high interest rates on unpaid balances, on average, around 19% and even higher on cash advances. Most credit card companies will not charge you interest if you pay off the balance owing before the due date. 

Rewards

Make sure you use a credit card that has an awesome rewards program. There are many out there, so it pays to shop around.  

Some have a cash-back program that offer up to 2% cash back on everything you spend. 

Some offer points that can be redeemed for travel, shopping or even brokerage fees. These points usually amount to about 1% of the amount you spend, but some are more.

Debt

I also encourage you to not overspend. This cannot be emphasised enough. No financial plan in the world  will work if you are spending more than you earn. It is mathematically impossible. I wrote an article about this and I talk about this concept in my books and courses constantly because it is so powerful. Credit cards are a wonderful tool that you can use to make your life simpler or they can pave the road to ruin, if used foolishly. It is always your choice.

Easy

The key concept here is that by using your credit card to fund your life, you are not spending any more than you usually do yet you are adding a reward for normal everyday living. Your life doesn’t change one bit, yet you still get a free vacation every couple of years. That is awesome. In fact, using the credit card for everything is actually more convenient because you never have to worry about having cash on you or which account you are taking money from. You also enjoy the benefit of one financial statement tracking all of your spending in the form of your credit card bill every month. If you are keeping track of your spending and trying to get ahead financially, knowing where you are spending your money is imperative. 

Buffer

You also have some leeway as to how much you have available at any time as it creates a nice buffer between the ebbs and flows of monthly expenses and income. Stuff happens. You can use the credit card to pay for it without missing a beat and keep up your repayment plan. As long as you are spending less than you earn, you will never run into trouble. 

Go Hard or Go Home

When I say pay for everything I am not exaggerating - you can pay for just about anything with a credit card. In addition to your daily spending out in the world, many traditional vendors now accept payment by credit card, like utilities and cable. Make sure you ask every company you deal with about their payment options. You never know. 

There are also cool services like Plastiq that will pay almost any bill on your behalf and charge your credit card. This is amazing as you can even pay your mortgage or taxes this way. If you are going to do this plan, you might as well go all in. Collect those points! 

One thing to keep in mind; services like Plastiq charge a transaction fee that may or may not exceed what you are getting back in rewards points, so it may not be worth it. Make sure you find out what the cost is, and do the math. There are many benefits that factor in as well.

As much as I like the convenience of just having to carry around my credit card, I also love services like Apple Pay, Android Pay, and Google Pay. Now you don’t even need to carry a credit card around with you, you can just use your smartphone to pay! Craziness! We are living in the future! Not every place accepts these payment methods yet, so you may want to hang on to the plastic a little longer, but there are more and more that do everyday.  

One really cool thing about using your credit card for everything is that it also opens up some interesting possibilities when it comes to investing. In my books and courses I explain some unique ways to use credit, and credit cards to pay off your mortgage quickly and accelerate your investing strategy. The rich know that using other peoples money is the smartest and fastest way to grow your wealth. You have that option too. Credit cards can play an important part of your plan for financial freedom. 

Taking control of your money takes many forms and using credit cards to improve your life instead of digging your own financial grave is a great way to begin.