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My father used to tell me to never own a credit card. His view was simple: owning a credit card will get you into debt and the interest rate and all the annual fees are just schemes for credit card companies to make business. As I grew up, I followed my father’s advice and didn’t own one for years. Then, a couple of years ago, I realized that getting a credit card might be a necessity now that you can practically purchase anything online. What changed my mind? The beginning of a new chapter in my life started two years ago. We were finally expecting our first child, (whom we’ve waited for an exceptionally long time) and realized that a lot of the items we needed for our baby were much cheaper and conveniently available online. I was using my debit card and it dawned on me that I was purchasing without any rebates on points. I was also worried that I might enter an incorrect (higher) amount and my savings could just be wiped out. It would be a great inconvenience trying to get that money back.

Owning a debit card has its conveniences, one of which is that you don’t have to withdraw and carry cold cash and the money still earns some interest (something is better than nothing). On the other hand, it may not be the go-to payment method for all occasions. So, for the first time in my life, I applied for a credit card and I got one with an average credit limit. I realized owning a credit card is not that bad after all, even though it requires a lot of discipline to manage one. If you are planning to have one, here are a few things I can share:

1. Do your research with the fees and interest. What is the interest rate? Lower is better. What are the penalty fees and late payment fees? How much is the annual service fee, if any? Can it be waived? The more you know and understand your card, the more you can make use of it wisely.

2. As much as possible, pay your bill in full at the end of each cycle as though the grace period does not exist, to avoid incurring interest. I personally pay all my bills down to the last cent at the end of each billing cycle. My bank may not be happy about this but I have never been charged any interest since I got my card. If you foresee that you may be paying in installments over time, then the card with the least interest rate may be an option to consider.

3. Know why you are getting a credit card and what you will purchase with this card. If you are planning to own a credit card so that you can swipe it anytime a new gadget comes up or a new pair of shoes goes on sale, then I strongly suggest you not to get one. You will only make it easier for yourself to buy stuff out of impulse. If you are looking at using the card for household items, child care items, gas or those recurring purchases that you would normally pay cash for and you know you have the cash to pay anyway, then using your credit card may be a great choice. The idea is to use the card in lieu of cash to buy items that you know you have the cash to pay for in the first place – based on your monthly budget.

4. Know your credit card benefits and utilize them. For this to work, you must accumulate credit cards points. You can use the rebate points for many things. Some credit card points can be converted to air miles which you can use to book flights almost for free. (you just need to pay taxes in some cases). I have done this a few times. Recently, I have also used credit card points to get a brand-new air fryer! And I did not pay a single cent for it. All I did was redeem my points.

A credit card gives you more purchasing power. This “power” can either make or break your finances. What makes one great is not just one’s power, but the authority one has to control that power.

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