If you have been reading any of my past blog posts, you may how noticed I often advocate paying for purchases using credit cards. I know for some people this may sound counter intuitive as they think of a credit card as something to use only when they don’t have the cash available. If you are one of these people then I think there is a chance I could change your mindset. I use my credit card the same way I would a debit card or cash, meaning that I don’t spend more than I have. This means you need to stay organized and make sure to pay off your card before the balance is due every month. I often set up the full payment with my online banking as soon as I get my bill, just so I don’t forget and have to make an interest payment. If you’re worried about racking up too much debt that can’t be paid off every month, just get a low credit limit at the beginning (around $500) and see how things go prior to increasing your limit. Building up good credit by paying your bills every month is also beneficial in the future when you want to borrow more money to buy a car or even a house.
The benefit to using a credit card for purchases is that using it earns me money. So not only is it really convenient, allowing me to buy almost anything easily online or in store without have to hit an ATM it is one of my many money making tools. Just be careful to use it only for things you need and don’t buy things just because of the points or cash back programs I’m about to describe. I prefer the flexibility of a cash back card, I find reward programs pretty frustrating to use, so I’m suggesting you focus on the cash back cards and more specifically the free ones.
I currently use a no annual fees Scotia Momentum Moneyback Visa for my purchases. Over the past two years I have made back an average of $280 each year on my everyday purchases. I am embarrassed to say I didn’t do much research when I got this card. I was already banking with Scotiabank at the time and they offered it to me so I just accepted it. I started thinking recently that I should take a look at all the available options to make sure that I am getting the most money back possible. So I did a lot of online research and have narrowed it down to my 2 favourite FREE Canadian cash back cards and lucky for me (for so many reasons), I have an amazing husband who is happy to participate in my research. are:
1) The Capital One Aspire Cash Platinum MasterCard ( I will try this one)
2) MBNA Smart Cash Platinum Plus MasterCard (my husband is going to sign up for this one)
The plan is to each try a different card and after a year we’ll see which one makes us more money.
|CAPITAL ONE Aspire Cash Platinum MasterCard||MBNA Smart Cash Platinum Plus MasterCard|
|1% cash rewards on all purchases
with no maximum limit
1% all other
with no maximum limit
|$50 bonus on your first purchase & 25% extra cash rewards every year. (They pay you an additional 25% of whatever you earned all year.)||5% gas grocery for first 6 months|
|Frequency of Cashback|
|Redeem as often as you like and there’s no minimum or maximum amount you can earn or redeem for. And you choose how you’d like your cash – either by cheque or a statement credit||Once your cash back totals at least $50 at the end of a monthly billing cycle, they will automatically mail you a cheque|
Remember these cards aren’t for people who keep outstanding balances on your cards since they don’t have the lowest interest rates. If you currently have a balance I recommend switching to a low interest rate card or line of credit, paying it off ASAP and then come join the fun!
I will do an update once we have been using the cards for a while and let you know how they worked for us.