The best everyday credit card is the Blue Cash Preferred® Card from American Express because it offers 20% cash back on Amazon.com purchases for the first 6 months (up to $200 back), 6% cash back at U.S. supermarkets (up to $6,000 spent per year), 6% back on select U.S. streaming subscriptions, 3% back at U.S. gas stations and on transit, and 1% back on all other purchases, earned as statement credits. Blue Cash Preferred also rewards new cardholders with a $150 statement credit for spending $3,000 in the first 6 months. So, this card gives very valuable bonus rewards in the most common everyday spending categories and is well worth its $95 annual fee, that is waived the first year.
If you’re looking for a credit card with no annual fee for everyday use, there are plenty of good options in that category too, including one that stands in particular. The best everyday credit with a $0 annual fee is the Citi Double Cash Card. It gives 2% cash back on all purchases, including 1% cash back when making the purchase and 1% back when paying the bill.
You should use your credit card for everything you would otherwise buy with your checking account or debit card, as long as credit cards are an accepted form of payment. It’s beneficial to use a credit card for daily purchases because credit cards offer $0 fraud liability guarantees, and you could be earning extra rewards by using a credit card.… read full answer
Reasons to use a credit card for everything:
Fraud is easier to handle on a credit card. If unauthorized charges end up on your credit card, you aren’t responsible for paying them, and the money hasn’t actually left your bank account yet. The process of cancelling fraudulent charges on a credit card is relatively simple when compared to the same process on a debit card. Unauthorized charges on a debit card have usually cleared by the time you notice them, so the bank has to investigate the claim and get your money back before the stolen money can be returned to your bank account.
You could save extra by earning rewards. Rewards credit cards typically give cardholders a percentage of their purchases back to them in the form of cash back, miles, or points. Lots of rewards credit cards have generous signup bonus offers for new cardholders, too. These give a certain amount of points, cash back, or miles as a one-time bonus for meeting a spending threshold in the first few months after account opening. If you were already going to spend that amount of money anyway, you may as well get a big bonus for it.
If you always pay your bill in full and the card has no annual fee, you get to borrow money for free. The time you’re given to pay for a credit card purchase – i.e. the rest of the billing cycle plus the grace period – can cut you some slack on cash flow from month to month. And as long as you pay the bill in full by the due date, you’ll get to keep that grace period.
Downsides of using credit cards for everything
It’s not always a great idea to use your credit card every time you have something to pay for. Budgeting can easily take a backseat in that scenario, and it’s possible that you’ll spend more than you can afford to quickly repay, leading to expensive finance charges. Paying interest on a credit card balance will usually negate any rewards you’ve accumulated, and then some, given the high ongoing interest rates that credit cards tend to charge. That’s why it’s important to pay off the balance on time every month when using a credit card for everyday purchases.
On the other hand, if you have a credit card with a 0% APR period, you can strategically use it to finance specific big-ticket purchases or reduce the cost of existing debt. But because that promotional APR period ends, you should not use that credit card for everything – if you do, you’ll risk having too big of a balance to pay by the time interest begins accruing. Besides, the credit cards with the best rates rarely have great rewards.
Things you should NOT use your credit card for
Credit cards are not accepted for everything, at least not directly or without significant fees. So, using one for every type of expense you might come across is not ultimately possible or cost-effective.
For example, using a credit card for mortgage, rent, or loan payments will generally require the use of a third-party money transfer app – and those transfers are usually expensive. Money transfer apps usually treat credit card transactions as cash advances, so they should be avoided due to high APRs and cash advance fees.
A good rule of thumb is, if you have to jump through some hoops or incur a high fee to use a credit card for something, it’s probably not a good idea.
You should use a credit card when you are making a big purchase, building your credit, traveling overseas or domestically, making hotel or car rental reservations, spending money in an emergency, and even making everyday expenses. In fact, if you can use a credit card for a purchase, you probably should, because all credit cards offer a … read full answer$0 fraud liability guarantee. If someone does steal your credit card information, all fraudulent charges will simply be cancelled, which is preferable to your checking account getting drained or frozen as you wait for a debit card fraud claim to get processed. And of course, when cash is stolen, it’s usually gone for good.
Rewards are another great reason to opt for credit cards when making a purchase. Rewards credit cards offer cash back, points, or miles for purchases – some of which can be worth up to 5% of the purchase amount, depending on the credit card. It’s essentially a discount on everything you buy with the card. Some travel credit cards offer benefits, such as luggage and rental car insurance, that can be very valuable to a frequent traveler. But you only get those benefits when you use the card for the travel purchase.
Examples of when to use a credit card:
To Build Credit. Credit cards are by far the easiest and most practical way to build credit history. Each month you have a credit card – even as an authorized user – credit bureaus receive information about your account. If you pay the bill on time every month and avoid racking up a big balance, you’ll have a good credit score as time goes on.
In Emergencies: Credit cards are a good option for surprise situations that no one plans for – car trouble, emergency vet bills, and household repairs, for example. And if your emergency savings aren’t quite where they should be, a credit card can offer a certain peace of mind. Sometimes paying interest can cost less than the alternatives.
For Everyday Purchases: Regular expenses like gas, cellphone bills, and groceries present opportunities to capitalize on a rewards credit card. You will ultimately save money from rewards like cash back, points, or miles. Just don’t undo rewards savings by carrying a balance and paying a bunch of interest.
For Large Purchases. Credit cards with 0% APR periods are great financing opportunities for big purchases. And they may offer extra safeguards that come in handy with a large purchase, such as price/purchase protection or extended warranty benefits. Using a rewards credit card will make the big purchase a little cheaper, too.
To Pay Off Debt. Using a credit card to pay off debt may sound contradictory. But if you have an existing high-interest debt, a balance transfer credit card could allow you to pay it off faster and for less money. Look for a balance transfer offer that doesn’t charge a transfer fee and has the longest interest-free period.
When Traveling: Hotels and car rental agencies often put pre-authorized deposits or holds on your debit or credit card. It is better to have funds temporarily held up on a credit card than your checking account. It’s also worth noting that credit cards are the cheapest way to convert foreign currency, so using a credit card overseas is an excellent idea – as long as you have one with no foreign transaction fees. Keep in mind that some credit card companies ask for notification before a cardholder starts traveling, so that they don’t mistake card activity from a new area for fraud.
It’s worth considering that your income and credit score might determine which scenarios you’ll benefit from using your credit card. For example, if you have a high interest rate or low credit limit, financing big-ticket buys may not be an option. So start small, with putting one or two regular expenses like gas or a gym membership on your card. Pay it off in full each month to create a history of responsible credit use – and to avoid credit card debt.
Lastly, there are times when using a credit card is a bad idea. Consider yourself and your habits before you take this advice to use a credit card for everything. Yes, credit card use has its benefits. But most of those benefits come with a big responsibility to not spend more than you can repay in a reasonable amount of time, and none of those benefits outweigh the negative effects of prolonged credit card debt.
If you don’t trust yourself to use a credit card for purchases, you can still build credit by simply having a credit card – even if you don’t use it.
The most prestigious credit cards are the Amex Centurion Card, the J.P. Morgan Reserve Card, and the Citi Chairman Card because all 3 cards are invitation-only. In addition, all 3 cards require applicants to meet high income and/or spending standards for approval.
Most Exclusive Credit Cards
American Express Centurion Credit Card (Amex Black Card): Most Prestigious Overall… read full answer
J.P. Morgan Reserve Credit Card (formerly Chase Palladium Card): Best for Banking Clients
Citi Chairman Credit Card: Best for Special Benefits
If you’re looking for a prestigious credit card, but you don’t quite qualify for an invitation from any of these 3 ultra-exclusive credit cards, don’t worry. You might get a better - and less expensive - credit card experience with a normal rewards credit card. Or, a good travel credit card might fit your lifestyle. The best credit cards don’t usually require a million-dollar income or private banking clout, and they still deliver plenty of great perks.
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