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March 5, 2019

Why It’s Okay to Have a Credit Card When You’re Debt Free


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Our second question of the month comes in from Amanda from Cleveland!

Hi! I had a question about credit cards and travel rewards.

My husband and I have no credit cards and we've paid off all of our debt except our mortgage. We're looking to go to Hawaii for our 10-year anniversary and didn't know if there was a credit card that we should sign up for to help us redeem more travel rewards.

We're also not sure if getting a credit card is a good thing to do since we haven't had them for a while.

Should we get a new credit card for the rewards or just pay with cash?

Let me know!

Thanks, Amanda

Thanks for reaching out, Amanda!

Nice work living with no credit card debt and having no debt whatsoever outside of the mortgage. Debt freedom rocks and you rock.


Since you’ve demonstrated that you can safely live on a budget and not incur any other debt, getting a credit card for the perks, rewards and bonuses is totally fine in my opinion. In fact, I wish I would have not gone credit card free for 5 years when I was going through the Dave Ramsey Financial Peace University program. My wife Nicole DEFINITELY wished that we didn’t go credit card free, but I was a little Dave Ramsey crazy there for a while.

I’m recovered now. I still love me some Dave, but I’ve learned a few things that Dave doesn’t like, and I like those things but I’m cool with it.

And credit cards (and the points that come with them) are one of those areas where I disagree with him.

Last year, we went little nuts on the credit card points (in a good way in my opinion). We used points, rewards and cash back to get a $6,000 all-inclusive trip to Cabo San Lucas for our family of 4 for around $300. The place was BEAUTIFUL. The kids club rocked. The poolside drinks were delicious. And the price made it all that much better.

Credit Card Rewards, Travel Hacking, Family Vacation
The Hills in Cabo San Lucas in 2018

Start With This Card

Now, Amanda, you might not want to go credit card hacking crazy like we did right off the bat. So if you wanted to start with one credit card to support your travels – I'd recommend both of you sign up for a Chase Sapphire Preferred. If you book your travel through their rewards portal after hitting the Minimum Spending Requirement, you can essentially get $1250 in free travel.

The offer on the website (at the time of this writing) has no annual for the first year, and $95 for every year after that. If you don’t want to pay the annual fee, just cancel the card before the year is up. If you like the card, then keep it.

Travel Miles 101

If you are interested in dipping your toes in the water of the travel rewards excitement as we did, check out the free course on Travel Miles 101.

I took this course after interviewing Brad Barrett on my show a couple of years ago. At first, I was SUPER skeptical being a hardcore Dave Ramsey guy, but after the interview and taking his course I became a believer. And now two years later, we’ve enjoyed multiple (nearly free) vacations to Mexico, California, and Florida.

The course is free and all Brad asks of you is if you like the course and the instructions, just sign up for the credit cards off of their site so they can get an affiliate commission. It would be your way of saying thanks.

Father and son on the beach walking

Travel Rewards Rock, But Be Careful

The free course warns you and I’ll warn you that this credit card game can be dangerous and costly if you don’t follow the rules.

The first MAJOR rule is that you ALWAYS pay your credit card off in full every month so matter what. It sounds like you’re doing this already Amanda, so you’re good, but for the other folks who are reading today, it’s a must. If you don’t have the discipline or the financial means to do that yet, then stay away from this game. It’s dangerous and will only cause you more financial distress.

But if you’re debt free, living on a budget and in control of where your money goes, I say enjoy the benefits that comes with credit card rewards.

I hope that helps Amanda. Whatever you decide to do, I hope you enjoy your big 10 year anniversary trip. You deserve it! May your next 10 years be filled with love, happiness and a whole load of financial success.

What do you think of credit cards and travel rewards?

Please let me know in the comments below.

Is It Okay To Have Credit Cards When You're Debt Free?


Marriage, Kids and Money, Andy Hill

Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.

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