Thanks for your detailed comment. It sounds like you have a great strategy that works for you. For me I’ve found that my typical spending in a month is lower than most people so getting to use a ‘free loan’ of a month’s worth of spending has minimal advantages for me.

Thankfully my debit card and online banking works in the same way as your credit card for helping me control my expenses with itemised and electronic lists of stores and transaction dates. As for bonus points, if I were spending larger amounts, say if I had a family and was running all the household bills through a credit card for example I can see how I could get better bonus points and airmiles but for now I’ll stick with my debti card for all but major purchases (where the consumer protection of a credit card comes into play).

Thanks again for commenting and i’ll continue to read you blog in Google Translate as my Portugese is not very good!

@Monevator. Thanks for commenting too. My bank doesn’t give the option of automatically paying off in full by direct debit -its the missing link in my otherwise ‘automated’ finance structure. But for the sake of one mouse click a month I haven’t looked into it further.

Besides the 1% cashback — which isn’t big I grant you, but over a lifetime those pounds and pennies all add up! – I also get effectively free use of Amex’s money for a month, which technically saves me a microscopic but still present amount of money, too. It’s a win win.

You’re quite right to warn about the dangers though. Clearly my card provider hopes to trick me into overstretching myself, and it prepared to tempt me with 1% cashback to do it.

A game of cat and mouse!

Great post on credit cards!

Since I decided to start a blog on finances focused on the Brazilian reality (only 2 weeks ago.. ) I became a fan of your blog because I think we have quite similar ways of thinking, particularlly when it comes to the “powerful weapon” of compounding.

Credit cards will be a topic of some of my future posts. I personally think that credit card is a great tool if you are a conscious consumer. In Brazil you can have up to 45 days to pay without interest for something you are consuming today. You can then free your cash to work for you with other stuff, like buying stocks for some days, for example, as long as you do NEVER forget you have to pay full credit card invoice on time. Free cash is always good, remember “cash is king!”

Getting mileage points is also something very good. I concentrate most of my payments on my credit cards (I have 2, one Visa and one Mastercard, with due dates spaced 15 days from each other) and have added points enough to get air-tickets.

The rational for me is quite simple, if I have to consume (being conscious, of course!) I pay with credit card and try to get some additional advantage. Credit card statements also help me control my expenses because they clearly show name of stores and dates. I have them in eletronic fomat exported to Excel…

But I never, ever use the CREDIT of credit cards. If you think it’s crazy that in the UK credit card interest rate reaches 15%, in Brazil the rate reaches INCREDIBLE 200% a year!!!