Some people use their credit cards for everything. Here’s why.

Are you getting the most out of your credit card?

When used responsibly, credit cards allow you to earn cash or other rewards for the things you buy every day. Plus, they can be valuable budgeting tools that let you easily see where your money goes each month and make any necessary adjustments. That’s why some people use their credit cards for all transactions.

Ready to do the same? We asked three people — Laureen D., Nate B., and Jessica L. — who use their credit cards for everything to explain why it works for them.

Here’s what they had to say:

How would you describe your credit card habits?

Laureen D.: I put everything on the card. I would say I’m a “power user.” It’s interesting, I completely shifted my behavior about eight years ago when someone asked me, “Why wouldn’t you use your credit card for everything? It’s free money for cash back.” And I realized, “Oh, you’re right.” So, I literally put everything, whether it’s big or small, on the card, specifically to get the rewards.

Nate B.: Same for me. We’ve got our cable bill on there, our phone/internet bill on there, the propane bill for the house — any kind of recurring monthly payment that I have, I try to put those on the card to get the rewards on those transactions as well.

Jessica L.: I charge as much as I can so I can get as much back as I can. I pay as I go vs. when the bill comes in at the end.

15% ARP, 1.5% cash back monthly payment: $1,000 pay-off time: 1 month interest charged: $0 cash back earned: $15 swipe savings: $15 $1,000 balance 15% ARP, 15% cash back monthly payment: $100 pay-off time: 11 months interest charged: $75 cash back earned: $15 swipe savings: negative $60"

Keep your credit utilization low. Resist the temptation to spend more than you normally would just to earn bonus points. Overusing your card can spiral out of control quickly and put you into serious debt. Additionally, using more than 30% of your available credit can bring your credit score down. So try not to overdo it.

How do you put cash back and other rewards to use?

Laureen D.: I accumulate all the rewards and, instead of saving them, I actually put that towards all of my holiday spending. I don’t redeem the cash back until November or December, and then after I’ve made all my transactions on the card, I’ll just move all the cash back onto the card. The holidays are so nuts that I feel like having that extra cash is really helpful so I don’t feel like I’m burdened during the holidays from a spend perspective.

Nate B.: I like to accumulate the rewards until they get to a substantial amount, then I allocate those rewards to savings. That’s why I’m generally a cash-back user as opposed to travel rewards.

Jessica L.: I feel the best way I can leverage it is putting it right back towards my bill. Then, it’s basically free money. 

What are your responsible credit card habits?

Laureen D.: I have several credit cards that I use for different purposes, but I definitely don’t carry a balance on any of them. I pay them off every single month. That’s really the most important thing to me. Another thing I would suggest is not having too many cards. I tend to open cards to specifically respond to promotions. Say I’m making a big purchase and the store offers you 20% off if you open the card — I absolutely take advantage of that. But I also know that leaving those cards open is not a good thing for a long period of time, so I do close them after a period of time.

Nate B.: I basically use my credit cards for everything I can, partially because I like to accrue the rewards, but also because it helps me keep track of my spending all in one place. I don’t necessarily like to have a variety of cards that I’m spending all over the place — I like to have one. Then, I can go in and see how much I’m spending on each category, what my money is going towards, and use it as a budgeting tool as well as a convenience tool.

Jessica L.: For me, when I started to get on track with my credit card usage (I struggled during college), I made sure that I had a budget and that my credit card usage was not exceeding that budget. However, because I really favor points-based or rewards-based credit cards, I charge utilities and gas, too. So even instances when I can use cash or my debit card, I find that I benefit more in the long term by using my credit card. Also sometimes, even before my bill is due, I’ll put money toward it so I don’t get a huge bill at the end.

How do you avoid accruing interest?

Laureen D.: I kind of have a system. I’m very aware of when my credit card cycle ends and when I’ll get my statement. So, as soon as I know what I owe for the month, I’ll go into my checking account and set up four weekly payments. Rather than getting hit in your checking account for one huge lump sum, I balance it out over four weeks so that my checking account balance remains stable.

Nate B.: I set up mine through an auto payment program, so I know that every month, the bill is going to get paid by the due date and on time. Even if I forget about it, it’s going to happen. Sometimes I’ll go in and make an additional payment mid-cycle if I have cash available or something like that. I’d also say that in any instance when I have a balance at a promotional 0% APR rate, just being very careful about making sure I’ve got a date set on my calendar that says, “Look,  I need to pay this bill by this date,” in order to avoid it rolling over and becoming interest-bearing. And I usually set that date for at least a month prior to that, so I have time to make multiple payments to pay off that balance.

Jessica L.: It starts with my budget and sticking to it. It can be easy to veer off course, whether you’re paying your bill as you go or not.

What to remember

Using your credit card for all transactions has its perks, — as long as you're able to keep up with your payments. Create a budget to keep your spending under control, so when it comes time to repay, you know you have the money to pay off your credit card bill in full. If you do that, you can sit back and enjoy all the extra rewards you earn!