How to Use Credit Cards to Simplify Your Finances

May 28, 2007

Want to keep on top of your spending with minimal time & effort? Not only do credit cards offer cash back, if used properly they can also help you simplify & organize your finances.

Use Credit Cards Wisely
As I mentioned the other day, we use American Express Blue Cash to earn cash back but we only use this approach because we’re responsible with our spending and pay off our balance in full each month. If you’re not confident you can be responsible with a credit card then using it to earn cash back and organize your finances in not a smart move.

Tracking Your Finances
One of my favorite things about using a credit card is it makes it easy to keep track of what you’re spending your money on with little effort. All of the cards I’ve ever used have features where you can download the last several months of activity to your computer. They typically offer direct downloads into Quicken, QuickBooks and Microsoft Money or you can save the data on your PC in a QIF, CSV, or Excel format.

I often download directly into Quicken and save it off as a CSV in case I want to use it for some other purpose later on. One thing to keep in mind is that many credit card companies only store your data for three or four months so make sure you keep up to date on your downloads.

Keeping It Simple
The ideal approach would be to use only one credit card so you only have to download information from one company. Since some merchants don’t accept American Express, I keep a Chase Visa card as a backup so I have to manage two different cards. The fewer you have, the easier it is to keep up with downloads and payments

Electronic Statement Archive
In addition to offering the capability to download your spending data, many companies also offer electronic statements where you can view current and old statements online in HTML or PDF format. They keep your statements online for several years, making it easy to go back on check on old statements. If your bill is stored in PDF format you can also easily save it to your computer to keep your own statement archive.

In an effort to save money on printing & mailing costs many credit card companies are urging customers so sign-up for electronic delivery only. They may not give you access to online statements unless you agree to stop receiving paper documents in the mail and only view them on the Web.

Analyzing Your Spending
Once you have your spending data downloaded onto your desktop or into personal finance software such as Quicken or Microsoft Money you can use that information to look for trends in your spending and make any necessary adjustments to your budget.

Both Money & Quicken offer great reports and charts that categorize your spending and give you a good overview of where your money goes. You may have to manually set categories for your purchases but some credit card companies help you save time by including the category for each purchase when you download your spending data into personal finance software.

Some credit card companies provide analysis of your purchases on their website, without even having to go through different software. For example, our Blue Cash card has a year end summary online that breaks spending down by categories. I can tell from a quick glance that we spent $1,745.85 eating out and $4,645.07 on our car last year. Of course if you use multiple credit cards you’ll have to consolidate this information to see the bigger picture.

Simplifying Your Finances
So how do all of these things simply my finances? The answer is one simple word, time. Having your credit card data and statements in one place, easy to access, categorized, and summarized gives you a quick and easy window into your spending habits. The best part is it requires minimal effort from you, which saves time. If you have a million things going on in your life like I do, keeping it simple and quick will mean you’re more likely to keep up to date on your money.

Credit Card Benefits


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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12 Responses to How to Use Credit Cards to Simplify Your Finances

  • J.B.

    Good advice. I agree that credit card can help you keep track of your spending. But, you’ve got to be real careful on how you use it. What you don’t want to do is fall into bad credit situations. Some of the debit cards from banks have the same way to keep track of expenses. PayPal has a card that allows you to keep track of expenses too.

  • Stanley Gallor

    The best way one can be debt free is to have a proper budget in hand. Paying off your debts should be the first priority every month. The moment I receive my paycheck, I set aside money to pay off my creditors then calculate other household expenses – set aside that money too and then if I’m left with anything, put it into savings. A lot of you do this already but some of you may not have yet made this a habit. Organizing your finances will help you become debt free sooner than you had actually expected.

  • Credit Card Criticizer

    Simplifying finances shouldn’t be separated from saving, as overspending will never result in simple finance management. So one should choose the card according to his spending habits: for those who do not spend much, low APR credit card with no annual fee is a good choice, as rewards is not the primary need for them.

  • credit card assistance

    Applying for credit cards online can be an extremely simple process”” and it really is. The most difficult thing is to know how to manage your credit card, so to say the first steps are the most crucial. A good beginning makes a good ending, do not forget.

  • tehnyit

    This is especially true when you are traveling on the road, and don’t have the necessary tools to keep track of your spending.

    For me, I would wait for the statement to arrive or check it via my internet banking to download all the data for the spending analysis.

    No matter how hard I try, I am will always loose at less 1 receipts while I am traveling.


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