I recently signed up and received a Citi Rewards card with a $1000 limit.
I have two questions I was hoping you could help me out with.
The first relates to my use of the card. I didn't apply and get this card with the intention of going into debt. I intend to use the card for most (if not all) my purchases during the month, and as soon as I make a purchase, I physically put the money (cash) aside in a drawer/box/etc so that when the time comes to pay the bill, I just deposit the money, write a check, and start over at $0 next month. The reason I thought this might be better than using cash, was because it allows me to get an idea of how much I spend each month, as well as not having to carry lots of money with me. Lastly, the card kicks back 5% on all gas and groceries, and 1% on all other purchases, and while that isn't a lot, any amount of money back seems nice to me. My question is, can you see any problems or reasons I shouldn't use the card in this way? I also want to start to develop a credit rating (this is my first card, no debts or credit history as of now), and I figured as long as I stay on top of things and put the money aside, don't spend what I don't have, and pay on time, it should work out well. But I may be missing something.. Am I?
Secondly, I got a letter in the mail today from Citi about the ability to "Personalize" my card with a picture of myself, that will then get placed on the card, as a sort of photo ID, and an added security measure. My question is, are there any negatives/downsides to opting to have my photo placed on my credit card? Do vendors even check this, or isn't it really a security measure at all?
I realize that credit cards are an opportunity to spend more than I have, go into debt, and ultimately screw up the financial aspect of the rest of my life, but I really do have the self control to not spend what I don't have, and I do put the money aside as soon as I spend it, so I am not worried about that aspect. But I am wondering if I am overlooking something, anything, and if I am, I'd really appreciate it if those of you that can think of, or see, something wrong with my methods could post here with what it is.
I was brought up by parents that are very anti-credit, and I think this is good for me, because I only buy things I can afford. They don't understand why I use a card instead of just paying cash, and while I think they kind of have a point, I like the benefits that using a card offers, providing everything is kept under control.
Is there anyone else that uses a credit card, and puts the money aside right away? What are you experiences with doing so, and do you find them to work better than just paying cash?
Apologies if this turned into more than two questions, but that is the nature of my ramblings.
Thanks!