Every time I spend money, I try to use a credit card. I feel that it is a lot easier to keep track of your expenses if you use a credit card. The only record of a cash purchase is the receipt, and we all know we either throw out the receipt or lose it. I also think that if you carry cash, you are more likely to use it. This might be a personal preference, however, since I know it is completely possible for someone to keep swiping their credit card and to not maintain a sense of how much they are spending.

If you are one of those people who struggle with using/abusing their credit card, you should consider just spending cash. Cash is a lot more tangible. If you have a hundred dollars in your wallet and you spend twenty, you can see how much less is there. This might help you think more about your purchases.

If you are able to be responsible with your credit card (this means keeping track of how much you spend each month and not carrying a balance each month) then I would make every purchase with the credit card. You should be getting something for every dollar that you spend. This is why I am a big fan of cash back credit cards as they give you back a small percentage of your purchase in cash. I do not believe in credit cards that do not give you anything for your purchases since I might as well use cash if I don’t get anything from spending it.
The best cash back credit cards that I have found are the American Express Blue Cash and the Chase Freedom cards. I use both of these, but in different ways since they provide different benefits. The Blue Cash card is really only beneficial if you spend a large amount of money each year. After you spend $6,500 in one year, you get 1.5% cash back on all purchases and 5% cash back on purchases at convenience stores, gas stations, and grocery stores/super markets. For the first $6,500 you only get .5% cash back on all general purchases and 1% cash back at convenience stores, gas stations, and groceries. Sometimes I have purchases to make for work for which I get reimbursed. I use my Blue Cash card for these purchases to increase my spending with that card in order to get to the more beneficial cash back percentage faster and at no real cost to me.

The Chase Freedom card is best for people who don’t spend as much per year. If provides 3% cash back on your top three spending categories and 1% cash back on all other purchases. I use the Chase Freedom card for mostly dining out (this is one of my top three spending categories) since that is one of my major expenses. For gas, groceries, and convenience store purchases I use my Blue Cash since I get 5% cash back on those.

Basically, these small percentages add up. If you do not get something out of your credit card (there are credit cards that give you points, travel rewards, cash back, and etc) you should definitely consider getting a new credit card. You might not want to cancel you old cards though, since doing that can hurt your credit score, but we can discuss credit scores in another post.