Why you should use credit cards

Every month, there are certain things we can expect to buy. We all eat so groceries is one of them. If you drive to work, then gas is one. We also probably go out for food every so often.

Some of my friends tell me they use debit cards to make these purchases. Others tell me they use cash. I mean you can’t go wrong using those as it’s much harder to overspend compared to a credit card. But I believe that credit cards are the way to go as they provide so many different values.

First, let’s get something straight – you will need to keep track of your usage. You cannot spend more than you make.

Now that we got that out of the way, why credit? There are a few things it can do for you, but let’s focus on the two main reasons:

You can get rewards

There are so many different types of rewards out there, from cash back to points that can be redeemed for free groceries to flights. I personally prefer cash back because I can do anything I want with cash, but with points, I’m forced to a specific usage.

It builds up your credit score

No, spending money does not instantly improve your credit score, but paying off your credit card each month does. Your credit score is going to be important when looking to get any sort of loan with a good interest rate. It’s the reason I was able to get a mortgage at 2.64%.

If you’re afraid of overspending with credit, I suggest you request a lower limit (say a few hundred dollars) and slowly increase it over a few months once you are more comfortable.

Now that we’ve agreed that credit cards are good, let’s talk about everyone’s favourite part: the best credit cards.

But first, let’s understand what best means. For me, it means something that is free and gives me the most rewards that are actually of value. When I compare points to cash, I always convert the points into cash to compare (for example, if it takes 100 points to buy something for $1, it means 1 point = $.01.

I’m always on the lookout for the best deals and the one I would recommend is Tangerine’s credit card. Not only does it give you 1% cashback on everything, but it also gives you 2% on two categories of your choice.

If you feel like you are the type of person who has self control and are willing to take on another credit card, I would suggest that to be the MBNA cash back card. This card gives you 2% cash back on gas and groceries, which allows you to choose 2 different categories with your tangerine credit card.

A great site to use for determining which credit card is best for you is ratesupermarket. They will instantly put all the cards that they think would work for you and you can then compare their benefits. All on one screen. They also have promos where you could get up to $100 for signing up for a credit card through them.

Credit cards can give you a lot more power, but as they say, with great power, comes great responsibility. Don’t over spend!

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