1. Higher leverage for your wallet. You don’t need carry a pile of cash anywhere you go, with this amazing plastic card, you can make payment on the amount a few times the cash you could carry in your wallet. Of course, you should not use it on the amount you can’t clear off on before the deadline. Otherwise you will need to pay interest.
2. Spending visibility. Average people will say that there is less control on the amount of spending when using credit card, I beg the different. I will say using credit card on every spending you make massively increase your spending visibility! Usually credit card companies will provide an online portal for user to view their statement up to daily basis, while the least credit card companies provide is sending you the paper statement. With this statement updated on daily or monthly basis, it is much easier for us to monitor our own spending pattern.
3. Convenience Input Data for Budget Planning – You can use credit card statement as historical input for your future budget planning. Best thing is you don’t pay for credit card statements. Bank track it down and send it to you, when you are minding your own business. If you review the credit card statement up to 4 months back, you can observe the pattern or trend in your spending habit. Is it increasing or staying average? If it is increasing, which items causes the jump in spending. Then ask the questions: Is the surge of amount causes by one-time item? Is it avoidable in subsequent month?  List out and discount the one-time and avoidable items, then you can project how much you will spend in each subsequent month.
4. Credit Card as Cash Flow tool. Credit card provides a lot of flexibility in term of cash flow. Let say if you are a freelancer who get paid irregularly, credit card enable cash upfront for you to smooth out any urgent payments. Be sure you can make it in time for debt settlement before due. However, a little bit of interest can be unavoidable some times. One must know how to balance the cost of money with the urgency of usage. If the urgency far outweighs interest rate then paying the interest charge is still justifiable. For example: What to do if you are not able to pay the rental in two months time? The interest is probably ten dollars if you don’t pay in the first month, while you will probably get kicked out from the rental house if you don’t pay for 1 month.     
5. Get Rewarded for Mindful Spending. While you spend on things you need, you also earn points on the purchase you pay with credit card. Most of the credit card companies have such system. One example of redeemable items is cash voucher. It is probably not much, but the thing is, this is something extra you get back while you spend. If you pay off credit card debt every month, this reward is like interest the banks have to pay you back. You don’t get those things by spending cash. Of course, don’t spend credit card for the sake of collecting points otherwise you will be out of control.

Read How Not To Be Millionaire on how you will never get rich by misusing credit card.

We often dream about financial freedom, we want to and more often talk about becoming financially free. But how many of us actually do something different to achieve this dream? Without a concrete action plan, and clearly define road map, no matter how ambitious is the dream, chances of becoming financially free will almost equal to none. Without a clearly define road map to follow, one will soon forget the dream of freedom and go back to live their normal daily life. Action plan can be constant reminder serves to remind a person of his objectives, goal and estimated deadline. Besides, in journey to become financially free, you will want to review your progress against the action plan to see how much progress you have made and how far away you are from your goal.

In order to become financial free we need to know what the definition of being financially free is. Financial freedom being the ultimate goal, of course, before achieving that, we need to know the two pillars supporting the freedom; those are financial stability and financial security. The later two are the basic fundamentals of being financially free; it is like the foundation of a skyscraper that built on a strong concrete foundation, in case of financial freedom, it is built on financial stability and security. In short, in order to achieve financial freedom, we must first achieve financial stability and then financial security.

Financial Stability

Financial stability is achieved when one person is able to live his life without income for 6 months or more. Wealth is measured by time instead of amount of money you have. Take the example of a fashion designer whose monthly income of 10,000 with monthly expense of 8,000 and a school teacher who only earns 2,000 with monthly expense of 500. Who do you think live a more stable financial? The answer is the school teacher. If both person lose their job, the fashion designer who live a high maintenance life style would not live through a month to go bankrupt, but for the school teacher, with a saving of 1500 per month in minimal, he/she can easily live for another 3 months without active income. In the first step in our road path to become financially free, we need to make sure we are financial stable before we can talk about financial freedom.

Action Plan to Financial Stability:

Now think. If you have less than 6 months to go into bankruptcy without a job, you need to start doing something. Below are some typical scenarios:

1. Get out of debt now! If you are living on a mountain of credit card debt, and you can’t seem to reduce the owing balance each and every month. From you credit card bill, list out items that you don’t need to spend. Without this desire items, it is easier to pay off the credit card.

2. When you can’t seems to save even though you are not on any retail/credit card debt. This happens when you pay yourself last. In order to save, you need to pay yourself first. Every month when you get your paycheck, put aside a percentage into saving and spend the difference. An average person will do the opposite that’s why they can never save, and the worst is they don’t even know where the money goes.

In the action plan, one needs to state how much money to allocate to debt settlement every month with a deadline. Only after all accumulated debts are cleared off, one can start saving for financial stability. Subsequent action plan needs to find out total expense of one self. Since financial stability is defined to be one’s ability to live through 6 months without any income before going into bankruptcy, thus the amount of money to achieve financial stability will be total expense times 6 (months), let us call it Financial Stability Amount Requirement FSAR. Next, state how much money you committed to save every month, let call it monthly saving commitment MSC. With all these figures: FSAR and MSC, one can easily find out how long he/she needs to achieve financial stability. Simply divide FSAR by MSC. The result of calculation is the duration required to achieve financial stability, one will know exactly the date he/she can achieve financial stability.

The next part is on financial security and writing the action plan to achieve it…