In today’s post, we’ll discuss 10 credit card tips for lawyers and professionals so you can benefit from the perks of credit cards without suffering from the penalties.
I’ll also share what two credit cards I carry in my wallet for all of my everyday spending.
I’m a big fan of earning credit card points on everyday spending and turning those points into once-in-a-lifetime vacations.
My wife and I have traveled all over the world together using credit card points. Using points, we’ve stayed at some incredible hotels like the Mandarin Oriental in Lake Como and the Park Hyatt in Sydney.
The key is to recognize that credit cards are a privilege, like any other form of credit. If you abuse the privilege, you’ll face severe personal finance consequences.
With that underlying principle in mind, here are ten credit card tips for lawyers and professionals:
10 Credit Card Tips for Lawyers and Professionals
- Only charge what you can afford to pay off.
- Avoid overspending because you’re using credit instead of cash.
- Do not treat your credit card like an emergency savings account.
- Understand how credit card interest works.
- Never miss a credit card payment.
- Know the fees associated with your account.
- Learn how much points are actually worth.
- Use points for travel instead of cash back.
- Be strategic about what, and how many, credit cards you have.
- Don’t spend money just to earn points.
1. Only charge what you can afford to pay off.
While it may seem obvious to only charge what you can afford to pay off, many of us have trouble following this primary rule of responsible credit card use.
Let’s look at some scary stats about credit card use to solidify this point:
- 48% of credit card holders carry a debt balance, an increase of 9% since 2021.
- 53% of people have been in credit card debt for more than a year.
- From 2023 to 2024, credit card balances on average increased 3.5% to $6,730.
- Credit card balances increased by $45 billion from the previous quarter and reached $1.21 trillion at the end of December 2024.
- Credit card balances have increased or remained the same for 10 of the last 11 quarters.
Before you read the rest of my credit card tips for lawyers and professionals, you have to internalize this first rule.
You need to commit yourself to only charging what you can afford to pay off.
This means creating a Budget After Thinking and staying within that budget.
If you’re having trouble with that, check out this post on my top ten strategies for staying on budget.
2. Avoid overspending because you’re using credit instead of cash.
Making a purchase with a credit card instead of cash makes it seem like we’re not spending real money.
We have all fallen victim to this tendency to overspend because of how easy it is to swipe a credit card.
Whether it’s the daily Starbucks habit, running up a bar tab, or buying another new toy for your kid, it’s a lot less painful in that moment to use a credit card instead of cash.
If you’re honest with yourself and know that you tend to overspend when using a credit card, try leaving your credit card at home. Bring some cash with you instead.
The simple act of needing to pay with cash instead of credit is oftentimes enough to stop you from spending on that thing you don’t really want anyways.
3. Do not treat your credit card like an emergency savings account.
This may be the single most problematic area we’ll discuss in my credit card tips for lawyers and professionals.
33% of Americans report they have more credit card debt than emergency savings.
The main causes of credit card debt are unexpected medical bills (15%), car repairs (9%) and home repairs (7%).
None of us are immune from these types of unexpected expenses.
Be sure to establish an emergency savings account so you don’t end up relying on your credit card when the unexpected happens.
These unexpected expenses can be substantial and result in monthly credit card balances that accrue large amounts of interest.
4. Understand how credit card interest works.
If you’re going to use credit cards as part of your everyday life, you should understand the basics on how interest is charged.
This may be the most overlooked of my credit card tips for lawyers and professionals.
Credit card interest is typically expressed as an annual percentage rate, or APR.
If you carry a balance on your card, the credit card company charges interest by multiplying your average daily balance by your daily interest rate. You will be charged this interest until your balance is paid off in full.
Credit card interest rates are typically variable, meaning they can change over time.
In the abstract, it can be difficult to fully appreciate how penalizing credit card interest is on our finances.
Let’s look at an example to better understand the consequences of carrying a balance.
Let’s say you just moved to a new apartment and purchased a $1,400 TV using a credit card. You don’t have enough money saved up for the full purchase, so you decide to pay off $100 each month. Your credit card charges 23% interest.
At that interest rate, it will take you 17 months to pay for that TV. You will end up paying a total of $1,645, which includes $245 in interest.
The $245 in interest equals 15% of the original price of the TV. That means you paid 15% more than the TV actually cost.
If that doesn’t catch your attention, don’t forget this is just the interest on one purchase after moving to a new apartment.
What if you want to buy a new sofa to go with your TV? How about a coffee table and a rug? Floor lamp? End table?
You can see how a 15% penalty on each of these purchases can start to add up quickly.
5. Never miss a credit card payment.
Write this rule down in stone: never miss a credit card payment.
If you don’t remember any of the other credit card tips for lawyers and professionals, remember this one.
It may seem unfair, but even a single missed payment can severely impact your credit history and credit score.
Because the consequences of a missed payment are so severe, it’s a good idea to set up your account for automatic payments.
You have options when setting up automatic payments. Ideally, you can pay your full balance automatically each month.
If that won’t work for your situation, you can set up automatic payments for the minimum required amount to stay in compliance with your account terms.
By paying at least the minimum amount required on-time each month, you will not be penalized with a missed payment.
What is the minimum required payment?
Credit card companies typically only require customers to make a minimum payment towards their balance each month. The minimum payment is generally 2% to 4% of your balance, or a predetermined minimum fee of around $35.
It may sound enticing to only pay the minimum. However, you will be charged interest on that remaining balance. That interest compounds and will be a major drag on your finances.
Let’s look at another example to see what happens when you only make the minimum required payment.
Let’s say you have a credit card balance of $2,000. Your minimum required payment will likely be between $40 and $80 to stay in compliance with your account terms.
In this example, assume the minimum required payment is $40. If you make the minimum payment of $40 out of your total balance of $2,000, that means your remaining balance is $1,960.
On the next billing cycle, you will be charged interest on that remaining balance of $1,960. At 23% interest, you will be charged $37.39, which gets added to your total balance.
So, on the next billing cycle, your total balance will be $1,997.39.
Let that sink in.
Even though you paid $40 last month, your balance only decreased by $2.61. Ouch!
Note: this example is for illustration purposes only and may not be precisely how your credit card company calculates interest.
By the way, credit card companies want you to only pay the minimum each month. That’s how they make so much money.
How much money do credit card companies make in interest and fees?
Hundreds of billions of dollars each year.
6. Know the fees associated with your account.
Beyond interest, credit card companies profit by charging fees, such as late fees and balance transfer fees.
For these credit card tips for lawyers and professionals, I want to focus on the annual fees tied to rewards credit cards. These fees can cost hundreds of dollars annually and cancel out the value of any points you earn.
For example, if you have a credit card that charges an annual fee of $500, and you only earn $400 worth of points each year, that’s a losing proposition.
You’d likely be better off using a credit card that does not charge an annual fee, even if that means losing out on some points.
For that reason, it’s important to do your homework before applying for a new card.
So, how can you determine if you’re getting enough value out of your card to justify the annual fee?
That leads us to our next tip.
7. Learn how much points are actually worth.
This is not an easy thing to do. Luckily, there are some great websites that are dedicated to credit card rewards that have done these calculations for you.
I like The Points Guy for determining the value of credit card points. While it’s not an exact science, The Points Guy calculates the value of each credit card company’s points and miles every month.
To give you an idea, The Points Guy currently values Chase Ultimate Rewards points at 2.05 cents/point and American Express Membership Rewards at 2 cents/point.
With that information, you can then determine if a certain credit card is worth having in your wallet.
For example, let’s say a particular Chase card you have charges an annual fee of $500 per year. When you look at your total spending from the previous year, you see that you earned 20,000 points using that Chase card.
Using The Points Guy valuation of 2.05 cents/point, that means you earned $410 worth of points. That’s $90 less than what you paid as an annual fee to have the card. That’s obviously not a good tradeoff.
Yes, credit cards come with other benefits that may add value to you. These benefits are oftentimes related to travel. If you travel frequently, these benefits may be worth it. If you don’t travel often, these benefits may not offer much value to you.
Keep in mind there are plenty of credit cards available that do not charge an annual fee and still offer points.
The takeaway is that you should regularly evaluate your spending habits and credit card reward programs to ensure you are still getting value from that card.
8. Use points for travel instead of cash back.
Many credit cards offer various options to redeem points. The easiest redemption option is to convert your points into cash that then gets applied to your balance.
While cash back is the easiest redemption option, it is typically the least valuable. You’ll get far more value by redeeming your points for travel rewards.
Credit card companies like Chase and American Express have partnerships with airlines, hotels and other travel providers. You can transfer your credit card points to these travel programs to maximize the value of those points.
If you’re reading a blog on credit card tips for lawyers and professionals, I’m guessing travel is a part of your life. Whether for leisure, business, or necessity, there should be plenty of opportunities to use your points for travel.
To figure out the best redemption options, it takes a little bit of effort. There are endless options and entire websites dedicated to point redemption strategies.
Before you get overwhelmed, I’d suggest first talking to your friends and family to see if any of them have already investigated the best redemption option for your personal situation.
Did you know that talking about money, and credit card points, is not taboo?
9. Be strategic about what, and how many, credit cards you have.
There was a time in my life when I had ten different credit cards because I wanted to maximize the points I earned on every purchase.
I had airline branded cards, hotel branded cards, and general travel rewards cards. I had credit cards with Chase, American Express, and CitiBank.
My wallet was thicker than a Harry Potter book.
I did earn a lot of points. But, it was so stressful.
Keeping track of what card to use for every single purchase was complicated. Making sure I paid off each card every month was even harder. In the end, it wasn’t worth it.
In these credit card tips for lawyers and professionals, I recommend you keep things simple.
I now have only two credit cards in my wallet: Chase Sapphire Reserve and Chase Freedom Unlimited.
I use the Sapphire Reserve for travel and dining and the Freedom Unlimited for everything else.
We still earn plenty of points and our finances are much simpler.
One other suggestion: if you’re in a relationship and share finances, I suggest you align your credit card strategies. Most major credit card companies allow you to combine points with a household member.
You can more quickly accumulate points by focusing on a single rewards program, instead of spreading out those points among various programs.
Same as me, my wife only carries the Sapphire Reserve and Freedom Unlimited.
10. Don’t spend money just to earn points.
As crazy as it sounds, you may be tempted to spend money you otherwise wouldn’t because you want to earn more points.
It’s possible to become so obsessed with collecting points that you forget about the strong personal finance habits you’ve worked so hard to establish.
It can be easier to justify careless spending when we trick ourselves into thinking that spending will eventually lead to a vacation. For example, if you have a credit card that offers bonus points at restaurants, you may be tempted to spend more money when you eat out.
Or, you may be tempted to pick up the tab for your friends even though that spending doesn’t align with your budget.
The temptation to earn points can overwhelm your plans to stay on budget. This logic applies to any type of spending, not just dining out and bar tabs.
Use your credit cards to spend within your Budget After Thinking, not as an excuse to justify blowing your budget.
To recap, here are my ten credit card tips for lawyers and professionals:
10 Credit Card Tips for Lawyers and Professionals
- Only charge what you can afford to pay off.
- Avoid overspending because you’re using credit instead of cash.
- Do not treat your credit card like an emergency savings account.
- Understand how credit card interest works.
- Never miss a credit card payment.
- Know the fees associated with your account.
- Learn how much points are actually worth.
- Use points for travel instead of cash back.
- Be strategic about what, and how many, credit cards you have.
- Don’t spend money just to earn points.