It seems people are split on using credit cards. I know more than a few financial experts that think credit cards are the worst thing you can do to your finances.
As an investment analyst, I always come back to the interest rate. What kind of rates are you paying on other loans? Can you get special deals on your credit card rate?
If you pay off your statement balance each month, you effectively pay a 0% interest rate. It’s hard to argue that’s not a great deal. Credit cards serve another purpose beyond convenient cash and bonus points. The monthly payments you make will be reported on your credit report.
1) Everyone needs at least one credit card just for emergency cash. It’s best to have the card exclusively for emergencies and not use it for anything else.
2) I travel a lot to conferences and other business meetings so it’s great to accumulate miles that can be used for free flights.
3) My FICO passed 740 last month but it wasn’t always that high. I destroyed my credit in 2008 and credit cards were a good tool in rebuilding my score. If you’ve got no credit history, find a card with no fees and the lowest rate you can get.
If you can pay your mortgage using a credit card and avoid the processing fee or get the fee under 1%, I’d say go for it. It’s a big monthly expense so you’re going to be earning massive points or cash back.