This week I received my first ever sign-up bonus credit card! Maybe the old adage, “It takes money to make money” is somewhat true. Mostly B.S., but somewhat true. How else do you get a guaranteed 20% return on your money?
I signed up for the Discover IT card. The sign-up bonus is a meager $150 when you spend $750. I already had some consumerist-asshole money earmarked for electronics (I hate myself) so I figured why not get a sign-up bonus credit card! $150 back on $750 is like a 20% discount, but without all the terribly, very bad gimmicks of a department store. I could have purchase $750 worth of non-perishable food items and received $150 back. You can’t do that at a crappy coupon-giving brick and mortar store.
Now that I have purchased my home I have no foreseeable need for credit. I will never buy a new car. I don’t need a bank loan. I don’t need another mortgage. My wireless provider isn’t going to do a credit check (Suck it, T-Mobile & Verizon).
In addition, my total credit limit is now higher so each month that I pay my bills to my credit card then pay those bills in full uses less of my total credit. This is good for my credit. Discover gave me a ridiculous $3,000 dollar limit. Why would I need $3,000? I don’t need it, but I could charge a major emergency expense to the credit card and reap 1% cash back. Then I pay off the balance from my emergency fund.
[Check to see whether using a credit card is wise. You can often negotiate a lower price at a hospital if you pay in full, in cash. This discount is way better than the measly 1% cash back].
Knees Weak, Palms Sweaty
If you’re scared or nervous of not using a credit card irresponsibly, I have a few suggestions:
- Do not get a credit card at all
- Get a credit card and leave it at home. Only use for bills like heat and electric.
- Get a student credit card with a small limit. My original card had a $300 credit limit.
- Charge a small percentage of your maximum limit each money. 15-20% is great.
Benefits of Credit Cards
For all their harm, credit cards can and should be used responsibly.
There are a lot of benefits to a credit card. Most people only know about two or three. There are at least seven!
- Build credit by using a small percentage of your maximum credit limit (~20%)
- Gain a permanent 1% sale on the world
- Fraud protection
- (New-er) See your credit score each month – free!
- Price protection
- Return Guarantee (Even if the store won’t accept the return. Dollar limit applies)
- Purchase protection (I.E. stolen or damaged)
In addition, the Discover IT card is specifically a great card to keep permanently. No yearly fee, free credit score. Only con is VISA is more prevalent in my experience.