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Dave Says: Asking for Trouble

Dear Dave,

I want to keep one of our credit cards open and use the bill-pay option for utilities and other monthly bills. I want to do this so we can continue earning rewards points, and the way I look at it, we’d just be re-routing the money and paying it off every month. My husband doesn’t like this idea and thinks we should get rid of them all. Am I just asking for trouble by wanting to keep the rewards card open?

Cheryl

Dear Cheryl,

Yes, you are. Life never works out exactly the way you think it will. You can make all the well-reasoned and best-intentioned plans you want, but sooner or later that snake is going to bite you.

The only thing I’d consider in a situation like this is a debit card that has a rewards system attached. Lots of debit card programs offer the same kinds of rewards programs offered by credit card companies, with one big exception—you don’t have to go into debt!

You need to stop chasing these stupid brownie points, Cheryl. According to Consumer Reports, 78 percent of credit card airline miles are never redeemed. Studies also show that people spend more when using credit cards as opposed to cash. That extra money you spend on things you don’t need is money you could have been saving and investing. So, where’s the reward?

Cut up the card and close the account, Cheryl. You don’t build wealth by using credit cards!

—Dave

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