Live Thrifty Without Cutting Up Your Credit Cards

It’s been popularly believed that Americans have been doing just that in the tough financial times of late. But studies have suggested that credit card use is actually on the decline. Whichever theory you hold with, it can’t hurt to educate yourself about the reality of using credit cards to cover your daily expenses.

Credit cards are best used in short-term situations. Ideally, card holders pay off their card balances every month to avoid interest fees. But when we use credit cards to pay for our everyday necessities like groceries and utility bills, we tend to carry a rotating balance. This racks up the interest and causes us to pay more for our monthly needs than we would if we paid cash.

Regardless of what we hear on the news, studies have shown that Americans are using their credit cards less. Instead of using their plastic to maintain their lifestyles, they are simply scaling back on their expenses by staying home and cutting out unnecessary charges, like premium cable. They are also using utilities more sparingly to avoid sky-high energy bills. And eating out is, well, out. More and more Americans are choosing to cook at home in the name of saving a buck.

If you’d rather strike a happy medium, consider getting a cash back reward card that gives you some incentive to make daily purchases. Cut back on your other expenses wherever you can, and use the money you save to make more than the minimum monthly payment on your credit cards.

Low-interest cards are another way to stretch your credit dollars as far as you can. Look for cards with a 0% interest phase. These introductory periods typically last 6 months to a year. The charges you make during that time won't be subject to interest. That's a good thing for thrifty card holders.

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