Moneyville advice

I click in now and then on an online news column from the Toronto Star newspaper called "Moneyville." The column always has really catching headlines, posing questions that are important to consider when it comes to managing your money. I was taught young and taught well how to manage money, which has blessed me my whole life. Sometimes I read something new I didn't know, and sometimes I read things that affirm practices I already have in place.

Today's article was one that talked about something I already take great advantage of: credit cards. I know this can be a really difficult subject for a lot of people. Abusing credit cards is one of the easiest and worst ways to get yourself into debt. Here is what the article, an interview with a successful children's author, reported on using credit cards:

"How do you prefer to pay?

We most often pay by credit card, but the secret is to use the card and not let it use you. We always pay off our card at the end of the month. We’ve used their money for free for a month and then have used the air miles to fly around the world. I think credit card companies must hate people like me."

This is exactly what I would have written about my own thoughts on credit. My parents helped me get my first credit card in my late teens. They taught me much about how it worked. What I don't remember learning, however, is that you don't actually have to pay it off every month. Seriously, until I was married, I always thought that you had to pay the entire amount when the bill came in. In fact, I don't think I even understood about interest and loans; I really just thought it was like another kind of bank card, and I never spent money on my credit card that I didn't already have in the bank. My parents were using the credit card to help me build a personal credit rating, not learn how to buy now and pay later.

Up until this year, that's all I ever used my credit card for. I put one or two things a month onto the card, and paid it off in full when the bill came in. Then I discovered the truth behind reward programs. Just as the author above wrote, credit card companies must really hate people like me. My current reward program? Cash. I use the credit card over the year, and at the end of the year the company sends a me money, a percentage based on the amount I used the card. A good friend told me how much they made by buying everything all year on their card. I made some calculations of my own and was astonished at the number I would receive. So I made the change. Every month I earn interest on the money in my bank account before paying it out at the end of the month, and then next January a big fat cheque will come my way. I love it!