This past weekend I went online and applied for the CapitalOne Venturesm credit card.
You might then be wondering why we’re applying for a new credit card when we so recently paid off the last of our credit card debt. And you’d be right to wonder.
Why we’re applying for a CaptialOne Venture card
And no, it’s not because of the thousands and thousands of commercials out there with vikings and Alec Baldwin.
We’ve been thinking about getting a mileage rewards credit card for a while now, and decided to do it as soon as we’d paid off our outstanding credit card balances. Ben’s parents (and my dad) live 1,200 miles away, and if we had our ‘druthers, we’d fly out to see them at least twice a year. We also have plans to go to England sometime in the next four years (before we have kids). Earning frequent flier miles for spending we were going to do anyway would be a definite plus.
While we were paying down our debt, I did research on the best mileage cards out there. After months of research, the CapitalOne Venture card came up again and again as one of the best credit cards for airline miles, so that’s what we decided to go with.
But it’s still a credit card, which many people avoid because by having a credit card you run the risk of running up more debt than you can easily pay off each month.
The argument for having a credit card
Love ’em or hate ’em, credit cards are useful tools.
- They protect your from identity theft and the risk of damaged or undelivered goods when you shop online,
- credit card companies have a more robust charge dispute team than most debit card issuers, and,
- as noted above, many credit cards offer rewards like cash back or frequent flier miles.
Granted, there are some debit cards that offer rewards (Perkstreet is among the most impressive), but they are few and far between, and getting fewer as new federal regulations require businesses to pay less every time you swipe your debit card.
The way I see it, those are at least three good reasons to own a credit card, assuming you can avoid frivolous spending.
Avoiding Frivolous Spending
I’ve never really been a frivolous spender. Only once in the last five years did I make a “frivolous” purchase on my credit card, and that was for a dress and shoes to wear to a wedding. (When I arrived in town for my friend’s wedding, I realized I had left my wedding outfit, on my bed…)
Every other credit card purchase I’ve ever made has been because I lacked an emergency fund. I accumulated my first $400 in credit card debt when I was in college and had to replace the ball joints in my aging Honda Accord. 
Now, however, we have a beginner’s emergency fund of $1,000 and are saving a little bit toward it every month, with plans to increase our monthly contributions when more of our debt is paid off. If an emergency arose, we could use our emergency fund, instead of our credit card, to pay for it.
It’s Good to have a Plan
With a tricky financial tool like a credit, it helps to have a plan for how you’re going to use it. Having a plan helps prevent you from getting buried in debt.
Our plan:
- We will use our mileage credit card to pay for gas and groceries, which are things we would have bought anyway, and we will pay off those purchases immediately.
- We will use our mileage credit card to reserve hotels and rent cars (better protection than using a debit card), but we will only pay the final bill with the card if we have the immediate savings to pay it off.
- We will not use our mileage credit card for eating out, purchasing alcohol, or any other frivolous/”fun money” spending.
I have also considered using our mileage credit card to pay some of the bills that we normally pay out of our checking account, and then pay off the credit card immediately, but I’m not sure if we want to go there yet.
Where Do You Stand?
What do you think about Rewards credit cards? Are they worth it, or not? Do you use a Rewards credit card? Do you use any credit card? I’d love to know!
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