Credit cards.

Those embossed pieces of plastic are thought of as tools of the devil, or as tools of the money savvy. For a number of years, I’ve looked at credit cards as the work of the devil, but I don’t now. More on that in a bit.

Let’s take a look at some numbers from Value Penguin’s recent article, “Average Credit Card Debt in America: 2016 Facts & Figures.”

• Average American Household Debt: $5,700. Average for balance-carrying households: $16,048
• Total Outstanding U.S. Consumer Debt: $3.4 trillion. Total revolving debt: $929 billion
• 38.1% of all households carry some sort of credit card debt.
• Households with the lowest net worth (zero or negative) hold an average of $10,308 in credit card debt.
• The Northeast and West Coast hold the highest average credit card debt – both averaging over $8,000.

Yep, with those numbers, it’s no wonder that credit cards carry a bad rep.

Now, using a credit card does not mandate carrying ongoing debt. Sure, when you’ve racked up charges on the card, you have incurred debt. But, if the balance is paid off by the due date the account is back to zero and no finance charges are applied to the account, thus no revolving debt.  The problem lies in that most folks don’t pay off the balance each month, and many simply add more and more.

Debit cards can take care of that problem. Simply use the card to pay for purchases and have the money come straight from the parent account. It’s a cool system that I’ve sworn by for years. It’s a system that works, but it lacks to opportunities for extras that credit cards can provide.

Perks. You know, those positive things that come with the standard features. Credit cards have two major perks, the ability to build and maintain credit and rewards. Well, not all credit cards have rewards attached. That’s why I ditched my old card for a Capital One Quicksilver VISA which pays cash back.

In fact, my new card had a $100 bonus back for charging $500 a month, within the first three months. My wife’s transmission went out in her car, so I put it on the card and covered that $500 in seconds. From then on my new credit card became my debit card, and I’m putting all of my purchases on it.

WHAT?  Yes, you read correctly. My new credit card is now my debit card, and as of yesterday (Aug. 8, 2016), my credit card balance was automatically paid, so I have no finance fees to pay for that billing cycle.

Now here’s the secret to how this works. I “Debitized” my credit card using a service called, wait, wait, hold on, here it is . .

DEBITIZE!

Here’s what’s involved in setting up Debitize:

1. Set up a Debitize account at https://debitize.com/, using a working email account.
2. Fill in the necessary information.
3. Link your bank account to your credit card.

That’s it. It took me minutes to set up the system.

Here’s a bit more detail on how Debitize works. When purchases are made with the Debitized credit card, the Debitize system notes the purchases and looks at the balance in the linked bank account and periodically withdraws the purchase amounts and deposits them into your Debitize account.

There’s a safeguard in the system, in that Debitize will not reduce the linked account below a predetermined amount. If Debitize sees that it will, it sends an email warning, which allows time to move money. This happened a number of times this month and the system works great.

Each week money to cover purchases is withdrawn and deposited, so there’s no piling up charges that one has to remember to cover at the end of the month. Debitize takes care of that job. A week before the credit card bill is due, Debitize automatically pays off the balance due for the billing cycle.

Oh, there’s also the option to suspend withdrawals on a purchase, in case one needs to move money from another banking entity. In addition, Debitized can be turned off for periods of time when there just won’t be enough money to cover the purchases. For me, that’s the time to lock the credit card up and not use it. When things get back to normal. Proceed with caution. For more information check out: https://debitize.com/faq.php

Cool, huh?

With Debitize, there is now a way to use a credit card to earn rewards and build/maintain credit, without worrying about paying the balance off each month, BUT for this to work, one must actually have the money in the bank to cover the purchases.

So, if you can discipline yourself to use Debitize as it’s meant to be used, I highly recommend you sign up. If you don’t have a credit card to do so, I recommend the Capital One Quicksilver card, if you want cash back. I plan to use the cashback rewards to fund our Christmas gift purchases this year. Yep, Debitize can make your credit card a positive personal finance tool.

I learned about Debitize from David Carlson’s article, “Scared of Credit Cards? Try this Free Service that adds Spending Safeguards,” at Young Adult Money. Thanks for the info David!

Now, go Debitize Your Credit Card to Keep Villainous Fees Out of Your Account!

Want to make a quick $20.00? Sign up for Debitize by clicking HERE and Debitize will credit $20.00 to your Debitize account. I have to be honest, I’ll also receive a $20.00 credit when you sign up using that link. So, how about signing up and getting us both $20.00? I’m sure you won’t be disappointed.