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by the author of The Faithful Prepper and Zombie Choices.
I’ll start off with the caveat that credit cards can be incredibly dangerous to those who cannot handle them responsibly. Just like beer, cars, kitchen knives, pet tarantulas, and just about anything else out there. For years, I’d followed Dave Ramsey to a tee. If he said to do something, I did it. If he said to avoid something, I avoided it.
And one of the things Dave Ramsey always said to avoid was a credit card.
So, I did.
For years, I never had a credit card.
And then I went on vacation to another state. I flew in, thinking I would easily be able to rent a car. Nope. Nobody accepted cash. Nobody accepted a debit card. I was stranded at an airport thousands of miles from my home with no means of getting out.
I also quickly realized that no credit card meant I hadn’t built up any credit either. When it came time to get a loan for something I literally couldn’t go without, the bank wouldn’t touch me. It didn’t matter that I’d gone years without debt, had a stable job, or anything. I didn’t have credit, and so the bank didn’t trust me.
I needed a credit card.
Honestly, within the United States, I think it’s almost impossible to live without one. It’s a system we’ve been suckered into, and no, I do not like it, but it’s the current nature of the beast. I haven’t figured out a way around it.
You may have found yourself in something of a similar position and now are wondering, “If I have to get a credit card, I want to get the best of the best. So, what’s the best credit card for me?”
If you’re somebody who always pays off their credit card in full at the end of each month, here are what I believe to be some of the best credit cards out there for the Frugalite…
1. Your local credit union’s credit card
The more local you can keep your purchases, the better. Not only are smaller, local banks typically more pleasant to deal with, I believe there are fewer security risks here as well. You don’t have to worry as much with the little guy about your data being sold to third parties as you do with pretty much all of the big credit card companies.
Another benefit of your local credit union is that the fees and interest rates on these cards usually are much lower than what the big guys are able to offer as well. Often, there’s not even an annual fee to open up a credit card with one of your local credit unions. (In contrast with 45% of major cards having an annual fee.)
No, there likely won’t be all the fancy features like airline miles, cashback, or points, but for somebody who is mainly concerned with a better degree of privacy (albeit, not by a lot), likely a smaller risk of being hacked, lower fees, and a simple means of building credit, this is it.
2. Wells Fargo Active Cash
For the Frugalite who is mainly concerned with saving money, this is a credit card to check out. For starters, there’s no annual fee to hold this credit card. That’s one of the primary things we’re looking for when looking at frugal credit cards. Why do I want to be forced to pay $100/year to spend my own money? That’s stupid.
There is a cashback program with this card as well. It’s only 2% (a lot of other cards give up to 6%), but something is better than nothing. If you spend $1000 in the first three months of being granted this card, you get an intro offer of $200 as well.
All of this combined means that this is a frugal credit card for the financially-responsible Frugalite.
3. Chase Freedom Unlimited
No annual fee? Check. Cash back? Check.
Those two factors alone help to push this towards being a Frugalite-friendly credit card. You can earn at least 1.5% cashback on your purchases with this card and hit up to 6.5% cash back on some select purchases. There’s a bit of juggling involved with the cash back, but it’s a pleasant feature.
4. Chase Freedom Flex
Another Chase card, the Freedom Flex also doesn’t have an annual fee. Some cards out there have fees well over $600/year, so we want to avoid anything reminiscent of that. There’s a $200 bonus if you spend $500 in the first three months of opening this card as well.
For most people, that’s fairly easy to accomplish. Even if you’re only using your credit card for “emergency” purposes and sticking to cash with everything else, $500 isn’t really a lot of money to spend in this department. Cars breakdown, housing appliances need to be replaced, and entropy tends to cause chaos.
Getting $200 for dealing with problems you were going to deal with anyway is nice. There is a cashback program with this card – 5% – but it only applies to rotating categories that are changed on a quarterly basis.
5. Capital One Quicksilver
A necessity for the Frugalite, the Quicksilver card doesn’t have an annual fee. The cashback program isn’t great – it’s only 1.5% – but it applies to every purchase you make, every day. You don’t have to worry about rotating categories or anything like that. You’re going to get some money back. Don’t let that be an excuse for spending more, but instead, use it as a means to pay off credit card bills in the future.
There is a joining bonus with this card as well. If you spend $500 with this card within the first three months you have it, you receive a $200 cash bonus. Pretty nifty, as this amount is likely to be spent within three months’ span relatively easily, even by the Frugalite.
A necessary evil?
I detest big banks and don’t like credit cards either. But at least in my case, I was forced into getting one. If you’ve found yourself in the same boat, my first recommendation would be to read everything that Dave Ramsey and Kiyosaki have ever written.
Let them teach you what they know, learn from it, and figure out how to responsibly control your own finances. Make a budget, and then stick to it like a dog with a steak. After that, and if you’ve discovered that you too cannot live without a credit card at the moment, then I recommend checking out the above cards for consideration.
Responsible money management is a necessity if you’re going to open up a credit card. I can’t stress that enough. If you don’t think you can handle it, stay as far away as possible. But if you can, these may prove of some value.
What are your thoughts? Should we avoid credit cards completely? Have you found yourself in a similar boat? Let us know in the comments below.
(Pssst. I’m not a financial advisor, nor do I pretend to be one. This isn’t investment advice. This is just a collection of my personal thoughts on the matter.)
Aden Tate is a regular contributor to TheOrganicPrepper.com and TheFrugalite.com. Aden runs a micro-farm where he raises dairy goats, a pig, honeybees, meat chickens, laying chickens, tomatoes, mushrooms, and greens. He has two published books, The Faithful Prepper and Zombie Choices. You can find his podcast The Last American on Preppers’ Broadcasting Network.