My Best Financial Tip: Spend Wisely

This site is dedicated to finding and using the best rewards cards in Canada.  But whether you’re getting rewards from a loyalty program, cash back credit card or travel rewards credit card, you still need to spend wisely.  What’s the point of earning rewards if you spend too much and rack up high interest credit card debt?

Credit Card Debt

You shouldn’t use a rewards credit card if you carry a balance from month-to-month.  These cards typically come with the highest interest rates – 20% or higher – which can dig you into a huge financial hole.  Heck, even if you forget to pay off your bill every once in a while, a rewards credit card is probably not right for you.

Stick with a low interest rate credit card, or a balance transfer card, until you get out of credit card debt.  When I finished University, I carried a credit card balance of about $5,000.

I didn’t even consider getting a rewards credit card until I paid off that debt.  I used the TD Emerald Visa, a low rate card that kept my interest payments down, until I finally consolidated that balance onto a line of credit and eventually paid it off.

Once my spending was under control, and I had a few thousand bucks in the bank, I switched to a cash back credit card (which I pay off in full every month).  Remember, when you carry a balance on a rewards credit card, you’re trading 1-2% in cash back or travel points for 20% in credit card interest – not a good idea!


One of the biggest criticisms of using loyalty programs and rewards credit cards is that they lead to overspending.  There’s a reason why marketing departments spend so much time and money on consumer buying behavior to create these programs – to get you to spend more!

In fact, studies have shown that credit card users spend more on average than those who buy with cash.  There may be some truth to that argument, which is why it’s important to spend wisely.

But I look at it this way:

I use a budget to track my monthly income and expenses and to keep my spending under control.  The budget, not the method of payment, is the tool that holds me accountable.  It doesn’t matter whether I use a debit card, credit card, or cash – I’m going to stick to my budget.

Then the method of payment becomes a simple choice:

  • Use a debit card for everything and pay bank fees (if you have an account with one of the big banks)
  • Use cash for everything, which is fine but you won’t earn rewards and retailers don’t give cash discounts anymore
  • Use a rewards credit card and earn cash back or travel points on your everyday spending

So there’s my best financial tip – spend wisely and you’ll reap big rewards!

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