Double Edged Sword - A.K.A The Credit Card.

I think that to many out there who are adverse to debts treat credit cards like it's the bane to their existence. They are wary of the high interest rate it carries should payment not be made on time. Legal Loan sharks, I feel is a fair description. But whether you carry credit cards or not, there are definitely benefits and disadvantages that you should know of.

As for myself, I do carry several credit cards. However I pay them off as and when throughout the month and definitely once more at end of every month. You might call me paranoid, which might be true, but i really don't like seeing a debit balance on my credit card statement. On second thoughts, i think i might have mild to moderate obsessive compulsive disorder. Why you ask then do I use credit cards? The reason for me is not to free up cash flow, but to pluck the benefits off the credit card tree. Cash backs, reward points, spend and redeem gifts and sign up bonuses.

Here are some of the credit cards I hold and what i use them for.

Standard Chartered Manhattan Card - Large purchases above $3000

• 5% rebate for purchases above $3k in a statement month.

Standard Chartered Prudential Card - Prudential Insurance

• Convert Point at a better rate to offset insurance premiums.  

DBS Esso Card - Petrol top ups at Esso

• Give a 17% rebate and convenience of having smiles loyalty program in the same card.                       

  POSB Everyday Card - Buying stuff at Watsons and movie tickets.

• 3% cash rebate at Watsons and 6% during their promo periods. I think they have discounted movie tickets when you use the POSB Everyday Card, please correct me if I am wrong.

Throughout these few years, I have gotten quite a lot of gifts and rebates from my credit card spends - Had to pay for wedding, home stuff and also occasionally helped people sign for large purchases. I feel that a credit card should not be used like a credit card, it should instead be used as if its a debit card. What do I mean? Well, simply put, don't use money you don't have. Don't spend your future money. For example, If you have $1000 in your spending account, make sure your credit card spending is less than that $1000. That way, you will always have money to pay it off and not have to pay the late payment and high interest charges.

How and what do you use your credit cards for? To free up cash flow? To be able to spend when you don't have the means now? To get rewards and cash back? Please share and also let everyone know if there is a good credit card out there.

PS: I know this is a post on credit card which = spending, but  why not get back something in return for something that you NEED to spend on anyway.

As always, save more spend less and invest wisely.
P.