It may seem counterintuitive, but a credit card can actually help you be more financially responsible — the key is to make sure you use it in a responsible way.
Lake Michigan Credit Union credit cards have features that make them a great tool to help you manage your budget, as long as you’re careful and spend responsibly. They can help you keep track of your transactions, stay on top of large expenses, get you lower rates on your loans, and more. Here are the top reasons why you should consider using a credit card to budget.
Capture every transaction automatically.
It can be a chore to manually track each transaction in your budget. Managing your budget with a credit card does the transaction recordkeeping for you. With our Max Rewards and Prime Platinum cards, you can view details about your spending in LMCU Online Banking or the LMCU mobile app, making it simple to track your spending habits. You can even search for specific transactions by name.
Get the most out of your rewards card.
Reward credit cards, like our Max Rewards card, give you cash back when you use them. By budgeting around the use of your credit card, you’ll likely use it more and get more rewards (just make sure you’re not spending more than you can pay off each month). On average, LMCU members earn $190 through Max Rewards each year.*
Maximize your checking rewards.
LMCU’s Max Checking can help you earn nearly $450 of interest a year** based on your daily account balance. By using your credit card instead of your debit card, you won’t be drawing money out of your checking until you pay off your credit card. This means you’ll have more money in your checking account throughout the month, which can help you earn more interest.
In your Max Checking settings, you can choose to use your credit card transactions instead of your debit card transactions to count towards your Max Checking requirements, which may make it easier for you to meet the requirements each month.
Consolidate your due dates.
Monthly charges such as your electric bill, gym membership, and Netflix subscription rarely fall on the same week of the month, let alone the same day. With so many reoccurring charges, you would need to keep a close eye on the calendar and your account balances if you’re paying them with check or debit. But if you pay these reoccurring payments with your credit card, then you can choose what day to pay your balance off and have the money come out of your checking account. You can also set up automatic payments to coincide with your paychecks, helping to ensure you’ll have the money you need when you need it.
Set up notification alerts. In LMCU Online Banking, you can set up eAlerts for any of your accounts, including your credit card. That means you can set it to send you a text or email when your balance goes over a certain threshold, or if you have an especially large transaction come through. This will help you stay on top of your balance and transactions with less effort.
Build good habits and great credit.
Many people don’t realize that paying off a credit card in full each month is one of the best ways to build credit and improve your credit score. By responsibly using your credit card for budgeting and paying it off before you get close to your credit limit, you’ll likely be able to get better rates on loans, including auto loans and mortgages.
If you’re ready to start taking advantage of these benefits and already have a Max Rewards card, then simply start using it for your transactions instead of your debit card. If you don’t have a Max Rewards card yet, you can easily apply for one online at LMCU.org/CreditCards.
For more on budgeting and responsible credit card use, visit LMCU.org/FinancialWellness.
*Based on members’ average annual earnings. Your cashback earnings may vary.
**Nearly $450 is earned at 3.00% Annual Percentage Yield (APY) on balances of $15,000. Rate as of 6/22/22 and subject to change after account opening. 3.00% APY is earned on balances up to $15,000 provided the following requirements are met each month: 1) One ACH/direct deposit transaction into the Max Checking share on the account; 2) Minimum of 10 debit card or credit card transactions posted to the account (excludes ATM transactions); 3) Must log in to online or mobile banking at least four times and; 4) Must be signed up to receive eStatements/eNotices (no paper statements). Requirements 1 – 3 must occur by 8:00 p.m. ET on the last day of the month to count. If requirements are not met, interest is not paid on balances. No minimum balance required. Fees may reduce earnings. Interest not paid on balances over $15,000. Limit one Max Checking per social security number. $5 membership required if not a member.
Topics: Wallet Wisdom