Credit cards are a ubiquitous part of American finances as individuals seek ways to gain financially for the present and future.

Regardless of age or income, credit card use is customary in the United States. In 2023, 82% of US adults had a credit card, according to the Board of Governors of the Federal Reserve System. 

Some people use credit cards and pay off the balance each month while others build up substantial credit card debt and carry a balance with a significant amount in interest.

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Although there is substantial debate regarding whether credit card use is beneficial or detrimental to one’s financial well-being, the 82% who chose to open a credit card for one reason or another believed it would have a positive impact on their financial state.

Whether you are considering opening your first credit card or are looking for ways to make use of your well-swiped plastic, knowing why and how they are used by those who believe credit cards are profitable for financial success can help.

Here are some of the ways that eight in 10 adults who own credit cards use them:

Everyday purchases, such as gas and food

Many credit card companies provide incentives like earning cash back or accumulating bonus points and travel rewards on purchases. With each use of the card, you’re rewarded according to the card’s terms. These purchases typically cover everyday expenses, such as groceries and fuel. The more you spend, the more rewards you can rack up.

However, only spending within one’s means has proven harder than ever with credit card use.

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Many credit card holders use them to aid their credit score and to build credit history. (  / iStock)

Americans’ credit card debt has soared to a staggering $1.13 trillion, as reported by the Center for Microeconomic Data’s Quarterly Report on Household Debt and Credit. On a personal scale, Experian notes the average debt per borrower stands at $6,501.

Paying for a vacation

Is financing a ski trip or tropical getaway with a credit card a good option, or should you fund it from savings?

Some credit card companies offer incentives for specifically using their card to book travel. Depending on which credit card you have, you can accumulate a certain amount of travel points by booking with the card. 

Choosing a credit card with an airline can increase the rate at which you earn points. If the airline is a member of an alliance, such as Star Alliance, SkyTeam or Oneworld, those points can be redeemed with an airline included in the alliance, according to nerdwallet.com. 

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Many credit card lenders provide various forms of travel insurance for trip cancellation, baggage loss and rental cars as a stated benefit. (Sam Hodgson/Bloomberg via / Getty Images)

The rate at which points are collected, however, is relatively low, and it can take a while to earn enough points for the free travel credits. 

“For most cards, every dollar you spend equals one travel mile. But when you’re trying to redeem them, each mile is worth about a penny, depending on the kind of card you have,” says the Ramsey Solutions website. 

The allure of a free flight may lead to overspending to earn the needed points. Additionally, paying for a trip that you wouldn’t be able to fund with your current savings can lead to financial havoc.

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Online shoppers often use credit cards instead of debit cards to earn reward points, miles and cashback on their purchases. But studies show that consumers tend to spend more with purchases when using a credit card. (iStock / iStock)

Recurring bills

One strategy that consumers take to earn rewards is to automate recurring payments with the credit card. Subscriptions, memberships and payment plans can all be set up with monthly withdrawal from the credit card.

The danger is the allure of introductory offers and trial periods. The consumer will be at a disadvantage while the company profits if they complete the initial sign-up process, forget about it and don’t track expenses on the credit card. 

Business expenses

A primary reason that some individuals open a credit card is for business expenses. This strategy helps them separate personal and business spending for easier tax preparation.

Business owners frequently receive rewards and offers for small business credit cards, enticing them to pursue their dreams with the promise of profit. 

Many small business owners use their credit cards to support their businesses and pay off debt when they begin to profit. (SouthWorks / iStock)

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Business owners should read the fine print carefully before jumping in. In many cases, they are expected to pay off the credit card balance within the introductory period to avoid steep fines and interest rates. Additionally, there is often a required minimum amount that must be spent on the card within this period to qualify for the card’s perks.

Small businesses are also enticed with credit cards because of the ability to earn rewards specific to business needs. Some rewards start to accumulate right away, such as cashback offers, and others require a minimum amount spent to qualify. 

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A consideration to make before maxing out your business’ credit card is that sales and consumer trends tend to ebb and flow. Using a credit card to pay business expenses and benefit from the perks is a great plan as long as everything is going perfectly, Dave Ramsey explains on his talk show. The talk show host describes this risk as “playing with snakes.” 

“We hope Cathay Pacific Airways will continue to improve service quality and support and enhance Hong Kong’s status as an international aviation hub,” Chan wrote in his weekly blog.

“Looking forward, local airlines should actively expand their route networks in response to the needs of economic development, business connections and public travel and facilitate the country’s Air Silk Road strategy.”

The “Air Silk Road” is the aviation connectivity part of President Xi Jinping’s Belt and Road Initiative, a China-centred trade network covering more than 100 countries.

Chan said the aviation corridor would spur bilateral trade with these countries.

Xia urged the authority, which manages the international airport, to leverage its unique advantages under the “one country, two systems” governing principle and to continue contributing to national development.

The financial secretary said he also expected more business exchanges and closer ties between Hong Kong and the Middle East after Cathay relaunched a direct flight to the capital Riyadh in October.

The relaunch will come months after a connection between the kingdom and Shenzhen, which got its first non-stop flights to the city on June 3 via China Southern Airlines, while Guangzhou also has direct services to Kuwait and Riyadh.

“More convenient transport between the two places will definitely strengthen closer exchanges between the two markets, bring together more new funds and create more new opportunities for Hong Kong’s financial market,” he said.

Cathay announced on Friday that it would buy back the remaining half of preference shares issued to the government, worth around HK$9.75 billion, and pay remaining dividends amounting to HK$2.44 billion up to July 31.

The shares were part of a government-led bailout in 2020 with a HK$39 billion recapitalisation package for Cathay, as the airline financially struggled amid a collapse of the global travel market.

The first half was bought back in December last year.

Chan said in his blog Cathay’s ability to fully take back the shares “marked the steady return of Hong Kong’s aviation industry to full normality”.

The finance chief said that, in 2020, the government had taken into account the overall interests of Hong Kong society, especially the need to maintain the city’s status as an international aviation hub, before investing HK$27.3 billion, comprising HK$19.5 billion for preference shares and HK$7.8 billion in bridging loans, in Cathay.

“This special investment arrangement made under such an extraordinary period achieved win-win results,” he said.

“On the one hand, Cathay gained financial liquidity, was able to survive its difficulties, and restore capacity fairly quickly.

“At the same time, this investment brought a return of nearly HK$4 billion to our coffers.”

Cathay in March reported a net profit of HK$9.78 billion last year, its first since 2019, after a net loss of HK$6.62 billion in 2022.

The company earlier pushed back its original plan to return to 100 per cent passenger capacity from the end of 2024 to the first quarter of 2025.

The Post has contacted Cathay for comment.

by Mark McDermott 

Finance Director Steve Charelian is retiring after a 35 year career with the City of Manhattan Beach. His final day is July 5. 

Charelian has served as the head of the Finance Department since 2018, taking over after his predecessor, Bruce Moe, was named City Manager. He had big shoes to fill. Moe was lauded locally and regionally for his stewardship of city finances and particularly in helping Manhattan Beach earn its much-vaunted AAA bond rating, the highest credit rating possible for a city. 

Charelian proved more than up to the task. During his tenure, the City faced one of the biggest financial challenges in its history, the COVID-19 pandemic. Charelian provided a steady, experienced hand, and the City emerged from the pandemic on strong footing. Charelian was instrumental in helping the City make some critical course corrections, such as seizing on historically low interest rates to issue $91 million in pension obligation bonds, saving an estimated $31.8 million over the next 25 years in retirement costs. Likewise, Charelian played a key role in addressing gaps in City funding, including an increase to its transient occupancy tax that generated $1.25 million annually and helped pay for 10 additional police officers; and the passage of a ballot measure last fall that provided $2.1 in annual revenue, replacing a subsidy of the City’s Storm Water Drain enterprise fund that had already bled the City’s General Fund of $6 million and threatened to take another $11.6 million over the next five years. 

Moe, at the June 4 council meeting at which Charelian introduced his final budget, took a moment to praise the finance director for the vital, time-consuming, and often thankless tasks he undertook. 

“Steve has just been a tremendous asset to the City,” Moe said, referencing Charelian’s accomplishments over the last six years. “The one thing I’ll say about Steve, is he’s kind of like that song, ‘Put me in coach, I am ready to play.’ It didn’t matter how much was on Steve’s plate, he would always come to me and say, ‘How can I help you?’ And that was true with the TOT, the pension obligation bonds, any of those projects. Steve was the first one to step up and say, ‘I know I’ve got a lot of shrimps on my barbie,’ as he would say, but he was always willing to take on additional. I want to publicly thank Steve for that.” 

Charelian said the he as not a “maestro with words” like Moe, but offered a few words to mark the occasion. He began his career with Manhattan Beach in July, 1989, he noted, which was only two months after Moe was hired by the city. 

“So we kind of had that career path together and grew together and learned and everything together,” he said. “My 35 year tenure has been filled with wonderful professional opportunities. I really want to express my gratitude to Bruce for entrusting me with the role of finance director. For nearly the last six years together, we achieved significant milestones of fortifying the city’s financial framework.” 

Charelian and Moe were both devotees of former City Controller Henry Mitzner, the no-nonsense municipal philosopher who worked for the City of Manhattan Beach for 48 years before retiring in 2020. Charelian learned early in his career, by observing Mitzner, that that traditional 9 to 5 workweek meant nothing —  weekends, early mornings and late nights, he’d see Mitzner come to City Hall when there was work that needed to be done. Through the years, Mitzner peppered him with words of wisdom from his own heroes —  the likes of football coach Vince Lombardi and basketball coach John Wooden. Charelian recalled one of those Wooden quotes at the time of Mitzner’s retirement: “Success comes from knowing that you did your best to become the best that you are capable of becoming.” 

At this week’s meeting, Charelian’s last, the City Council held a brief ceremony recognizing his contributions. Moe recalled an instance in which Charelian did just what that Wooden quote advised, although in a uniquely Charelianesque way. In 2008, the City’s revenue service director was retiring, Moe said, and Charelian applied for the position. Moe was hesitant, because he just didn’t think Charelian was “quite ready.”  

“And Steve, being the social guy that he is, and the closer that he is, invites me to Il Fornaio for a happy hour,” Moe recalled. “So we sit there, and by the end of 45 minutes and a couple glasses of wine and a few margherita pizzas, Steve had me convinced, because he brought so many qualities… that gave me a nice runway. He was just always there, on the spot, to get things done. But it was that enthusiasm, that intangible thing that you can’t necessarily learn. It’s just part of Steve’s personality that really sold it, and I never looked back.” 

Mayor Pro Tem Amy Howorth went through the many notes of recognition sent by neighboring cities as well as MBUSD, State Senator Ben Allen, U.S. Congressman Ted Lieu, and even more unusually —  particularly for a finance director —  the Los Angeles County Sheriff’s Department and State Treasurer Fiona Ma. 

“So you have touched not just all of us and the residents in our town, but obviously been a presence in the county and have been recognized by state leaders,” Howorth said. “It is so well deserved and well earned. You have done excellent work with your whole heart, and you’ve even convinced some of my colleagues that they were wrong, I’ve been told…. [which speaks to] how much we have trusted your judgment and how much that has meant to all of us in our community. Because there’s numbers on a page, but they tell a story, and you have helped us understand that story, and write the story for our community.” 

Councilperson Steve Napolitano, who was first elected to council in 1992, three years after Charelian began his career, said he was among those sometimes convinced to change his mind by Charelian’s arguments. 

“I want to say, Steve, as a friend, we’ve shared a lot of thoughts together and dedication to this city,” Napolitano said. “And you know that thing about being wrong and changing gears? We’ve had so many great discussions over the years where I think we’ve pushed each other to get outside the norm and our comfort zones. We’ve gotten —  you’ve gotten —  a number of things passed that have put this city on a financial foundation that is going to keep us in good stead, especially our recent vote on storm drains. You’ve helped get us 20 years of good budgets, and now we need to address our CIP [Capital Improvement Projects] and you’ve set us up for that.” 

“The good folks who work in any institution, especially here in the City, are the ones who leave the place better than how they found it,” Napolitano said. “And Steve, you’ve done an amazing job here. You’re leaving Manhattan Beach in a better place than you found it…As a dedicated employee who bleeds Manhattan Beach, you can’t look for a better employee than someone who just believes in what they’re doing.” 

Councilperson Richard Montgomery, who worked closely with Charelian as mayor during the Great Recession and then again as mayor at the onset of the pandemic, said that so much of what Charelian has done is work that is essential but unknown to the general public, such as successfully “clawing” for federal reimbursement for funds needed during the pandemic. 

“All these things you don’t see behind the scenes, this is the guy who made it happen,” Montgomery said. “Along with Bruce, and learning from Howard Fishman in Risk Management, and Henry Mitzner from the old Finance days. It’s a long succession of leaders here, and in finance you don’t see them all, and all the work goes unheralded. But we know what they do.” 

Mayor Joe Franklin presented a gift from the City, a green street sign that said, “Charelian Way.” 

“We are going to add that to Google Maps, right?” Franklin said. 

Charelian closed with some brief remarks, thanking his wife, RC, and his sons Knox and Chase, as well as the council and the City employees he worked alongside. Charelian, a Manhattan Beach resident whose unconventional professional journey began at El Camino College, vowed to remain steadfast in his dedication to the community. 

“I leave with a profound sense of gratitude for the privilege of serving a City of Manhattan Beach employee for the past 35 years,” he said. “The lessons learned and relationships forged will forever hold a special place in my heart. Thank you all for this incredible opportunity and for being part of my remarkable journey. This isn’t goodbye, but I’ll see you later.” ER