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Credit vs. Debit: Best way to pay?

Posted at 10:40 PM, Feb 02, 2016
and last updated 2016-02-03 08:35:08-05
We are often led to believe that credit cards are dangerous. We can rack up debt with high interest that can take years to pay off.
 
But there are ways to save and ways you can make money off your credit card.
    
"I just don't tend to use credit very much," says one shopper.
 
Often times credit cards offer reward programs that are good for cash-back or points that add up for free gifts.
 
“When there’s money laying on the ground you want to bend over and pick it up. I don’t care if it’s a penny, a nickel, a dime, a dollar. That’s money you don’t have to work for,” said Las Vegas Financial Advisor Ken Himmler.
 
We spoke with a Green Bay financial advisor who says being smart about using your credit card translates into some significant cash.
 
“If done well you can probably rack up five to six to 700 dollars in award dollars,” Alan Hicks with Summit Planning Group explains. “Which is basically free money.”
 
That’s free money towards a new car or payments to your child’s college tuition. The best part is you can choose whatever type of savings you want.
 
That includes everything from prepaid college tuition, travel points and hotel rooms to paying down your credit card bill.
 
Experts warn that you do need to be disciplined about paying the bill.
 
“If used correctly, meaning paying off the balance every month, you’re substituting the credit card for cash and that is a wonderful thing to do as long as the balance is paid off at the end of the month.” Hicks said.
 
That way the balance due never gets too big. Hicks says it’s a smart way to get your money working for you.
 
“Often times as much as you can put on the credit card, the daily expense, works out well,” Hicks explained.
 
If used incorrectly you can cause a lot of damage to your credit score. But when you follow the rules and do your research, sometimes credit can be the best way to pay.