*Quicksilver 1.5% CB everywhere
*Chase Freedom 5% rotating CB
*Amazon Prime Visa 5% CB at Amazon, 2% on gas
*Amazon Store Card 5% CB (used for no-interest financing offers)
*Discover IT (5% rotating CB)
*Uber Visa Card (4% CB on restaurants, 2% CB online)
@Collin1000 Have the same no annual fee philosophy (haven’t found any that more than covered that fee) unless you include Costco Citi & SAMs Synchrony (crappy bank) club annual membership fees
Hate shopping at Target but if you spend a dollar there, gotta have their Red Card for 5% back on their stuff.
BTW, that Amazon Prime Visa also gives 2% back at drug stores & 3% on travel&restaurant.
A trick with Discover and others - check out the discounts they offer on gift cards - often 20-25% so you’re paying 80 cents on the dollar for the gift card… with reward dollars.
@ninjaemilee I was hesitant in opening a credit card for several years but I realized that having no credit history limits you in some ways. I wanted to make sure I built up credit so when I needed to open a larger loan (auto/house) I would be able to get better rates.
I don’t really want to have to play into the system but it seemed like a necessity to me. The plus side that is if you treat your credit card as if it were a debit card you can get a little more back via promotions and rewards.
@smyle Thanks for your counterpoint! Let’s go through them:
No interest.
If you pay of your balance every month you don’t have any interest. Rewards such as cash back, miles, or reward points are generally a trade off for potential interest if you miss a payment. If you setup automatic monthly payments and keep your balance to something you can afford it’s easy to ovoid interest.
Spend less.
That’s a fair point. I can understand the mentality of cash going from your bank account reducing spending. Even better is just buying everything with cash. Buying anything always feels more impactful when you have you count out each dollar bill for it.
However, as a counterpoint, it can be almost as risky as cash. If someone steals your debit card, it’s money straight out of your pocket.
No bills.
Automatic bill pay. I check my online statement for fraudulent charges and keep my balance to something I can pay off entirely every month. By the time you see a fraudulent charge on your debit card the money is already gone.
No sharks.
What? Sharks? Okay, some cards have annual fees and very high interest rates. However, there are many cards without annual fees that have great rewards. A credit card through your bank is often a great choice if your concerned about getting scammed by an “outside” company. I have one card with an annual fee, but the airline rewards make up for it and offset the cost. (no international transaction fees, free checked bags, earlier boarding on flights, air miles for free flights, etc.)
Dave approves.
This is just Dave patting himself on the back for making the four earlier points, which is fine, but I’m not sure why it’s a fifth point. As my counterpoint and summary I would say consider security and rewards.
@Krydon agree about building credit. Several years ago I started using a credit card for daily purchases and paying it off at the end of the month. I started with a measly $300 limit. Now they’ve bumped me up several times so I have a fairly substantial limit and my credit actually showed that I was responsible to make payments on time. It has helped me start the process of buying a house.
I did that for 10+ years. Still bit me (see my story below). You play with snakes, you get bit.
Not if you choose a good bank. My bank offers the exact same protections as a credit card. Same liability, etc.
“By the time you see a fraudulent charge on your debit card the money is already gone.” I’ve had this happen. I went to my bank and signed an affidavit saying it wasn’t my charge. They unwound everything, including overdraft fees. Yes, it was a minor pain (just like it would be with a credit card company), but overall not a big deal.
It’s true that some are much better than others. Here’s the deal though - statistically speaking, they make money off of you. Period. Otherwise they wouldn’t be in business.
You’re 100% correct. If I could have posted the article without this point, I would have.
@smyle Ah, it’s nice to hear some banks are very helpful with fixing fraudulent charges. However, you didn’t get your money back until it was resolved, right? With a credit card your money isn’t gone until you pay the bill.
With several different credit cards I’ve had, they have contacted me about strange charges. Usually it was me on vacation or buying something unusual. However, when there were actual fraudulent charges(several hundred dollars in jewelry) all I had to do was say it wasn’t me, confirm a few things over the phone, and that was it. They removed the charges and sent me a new card (the number was likely stolen by a skimmer). I was never out any money.
There are several ways credit card companies make money. Interest is one one of them, but there are enough people out there paying plenty in interest that they’re not going to try to “trick” you into paying interest. As I said, some some annual fees, but many don’t. Some will even waive the annual fee if you call them and say your going to cancel. Possibly the biggest is transaction fees. Every time you use your card they charge the merchant a fee to process the transaction. The fees vary, American Express has very high fees which is why many merchant don’t accept it.
Research indicates you spend less when you pay cash, however having a good credit rating saves you money in multiple ways too - in most states lower car insurance rates, may not have to pay a deposit on utilities…
Credit cards make money off of merchants in that they have to pay a fee as a percentage of your charge to the credit card company so the company makes money off of you even if you always pay your bill in full every month. Of course we all pay for that as merchants take that into account when they price things.
@Coldrice Actually I’ve had my bank’s fraud center (it’s a small town bank, so they outsource it) call me multiple times with potentially fraudulent charges. A few times it was just a strange, but legitimate (typically online) purchase. A few times it was fraudulent. In all cases, they called me, asked if it was legitimate, and took care of it on the spot. There was only one time they missed a fraudulent charge where I had to fill out paperwork.
The process was virtually identical to the times I had fraudulent charges on my credit cards, back when I had them.
@ninjaemilee For some context, I’m a 26 year old whose only real line of credit is the student loan payment I make each month (or the extra I can afford to pay). I’m in a fortunate living situation right now where I don’t have any utilities or rent in my name. I guess I’ve just been apprehensive about taking a step towards a credit card since I don’t want to take on any more debt. Thank you everyone for your input and you’ve given me a lot to consider.
I use credit cards as currency. I pay it off each time a purchase is made. I earn cash back at 5% or less but, more importantly, I enjoy the protection credit cards offer in added warranties and no liability when transactions don’t transact properly.
Airline miles. That’s why. Everything goes on them…health, home, and car insurance premiums, groceries, heating oil, cable bill, etc. It adds up. I pay them off each month. Plus I get cost-free currency conversions for purchases made overseas. Later this year I am going to India for about $100 RT, using miles accumulated, mostly not by flying.
@Ambiverbal I get cruise miles and on board credits on my main card. I got it when I was planning a trip that included two back-to-back European cruises for five people. The cruise costs came to about $12k. The credit limit on the card started at $3k. So I made an agreement with the travel agent to pay off the amount in four payments a few days apart. I’d max out the card and pay it the same day (the others had already given me their share). As soon as the payment cleared on the card, I’d do it again, till it was paid off. I ended up with about $600 in onboard credits with the cruise payoffs and the bonus points for spending a certain amount in the first 90 days. Everyone was happy with that as I did all the complicated planning for the trip, so they were happy I got some benefit out of it. Now I use it as my everyday card and end up with a couple hundred bucks in ob credits when we cruise every couple of years. The interest rate is about 7%, no annual fee, and they tripled my limit.
I’ve got about 8, but it’s just for the benefits they give, not to carry a balance. Cash back, discounts, purchase protection warranties, travel benefits/protections. Not to mention if something fraudulently happens, it’s on the line of credit and not on my bank account.
@TheCO2 As an FYI, I would never open up a Home Depot account again. It hurts your credit score – especially for Equifax.
As an example, you can see how Equifax shows my score lower than the other two companies.
When I read the details on how the score is computed, the negative factors are clear:
The $1,167 balance is normal for me and all 3 companies report that. I spend well over $2k each month but pay it off in full at the end of the month. But look closely at the #2 reason, “You have 1 account from personal finance companies.” THD stands for “The Home Depot” and I closed that card about 5 years ago but they still report it to Equifax every month so it doesn’t leave my record. It doesn’t show on Experian or Transunion so you can see that it’s giving me a negative hit on the score.
The same should be said for any store credit card. Be careful because those could show up as a finance company which is negative credit because people usually go to a finance company as a last resort when a bank or credit card will not approve them.
@cengland0 That’s interesting and I will keep that in mind. I only opened it because I needed a new lawn mower and I liked the idea of no interest for six months, but I guess that is how they get you.
@PocketBrain The only use for cash that I can think of is buying lottery tickets, since in my state I’ve been told it’s illegal to buy them with a credit card. I can’t remember using cash for any reason other than lottery tickets in the past… very long time.
@Collin1000 Illegal to buy lottery tickets on a credit card? That’s interesting because I know people do that because it’s called quazi-cash and my company’s credit card agreement charges the fees as if it was a cash transaction. Would cost you more in fees than the lottery ticket costs so I wouldn’t recommend it but I didn’t know any states made it illegal.
You can also buy chips in vegas with a credit card and those are quazi-cash transactions as well. Travelers Checks and Money Orders are also quazi-cash.
“If a machine can’t accept credit cards, their next instinct might be to go to an ATM and get a cash advance with their credit card,” said McClary. Because of the high APRs typically associated with credit card cash advance transactions, “You are actually ending up costing yourself more by doing that. It’s a very dangerous move to consider getting a cash advance to pay for a lottery ticket.”
With the bank that I worked for, quazi-cash transactions like lottery tickets have the exact same transaction fees and interest as getting cash from an ATM.
Another note. When you buy a product with a credit card, you have a grace period if you pay your account in full each month. That means you don’t pay any interest on your purchases. However, cash advances have the interest start from the transaction date until it’s paid off. This is very tricky for banks because they will send you a statement that says you owe $100 and you pay $100 but there was some time from when that statement printed until the bank received your payment. Your next statement will have additional interest for those extra days.
I use my Marriott cc daily for rewards. I also have a Disney because of the kid, 2 from bank of America that pay bills for points, and one capitol one card for international travel.
I’ve had more in my life but lack of use has cause the creditor to cancel them. Had 7 or 8 to pay for my wedding 10 years ago. And had many store cards that have been closed. The wife now keeps the store cards open…aka banana republic.
I think I’ve had a dozen or so over the years, with the max of about 5 at any given time. It worked out well for many years, I was paying them off at the end of the month, getting my cash back, and thinking I was being really smart. Then I bought a couple of things I shouldn’t have, and kept getting further behind. This led to a “well screw it, one more meal out/Christmas present for the kids/night at the movies/whatever isn’t any worse than it is already” attitude.
Now 0: Working the Dave Ramsey plan. I still have some debt, but plan to have everything including my house paid off in about 5 years.
I love my Amazon card for all the points it accumulates, usually allowing me to get some extravagance I would never allow myself to get otherwise.
In the last year or so I switched to a Southwest Airlines card (my son goes to UofA) and with over 100K points, I’m gonna save some flight costs this year for sure.
If I count store cards as well as credit cards, I have 15 or so. None have annual fees and I have no idea what interest rates they charge (I haven’t paid interest on a credit card in decades).
Technically, I’m not a churner because I’m not chasing rewards, but rather 0% balance transfers, tho maybe that counts.
I carry a balance on several cards (four at present, totalling about $44K down from a high of about $55K), but only at 0%. With balance transfer fees, I average an APR of ~2.5%; the max I’ve ever paid for any single balance transfer is 4%.
Basically, I decided to use CC to finance my divorce (child support) and tuition, primarily because using CC balance transfers is a LOT! cheaper than educational loans with the added benefit that CC debt does not survive bankruptcy, if the shit hits the fan.
Now that @miraclewhispers (daughter unit 2) is done with school, I expect to be debt free before Summer 2019 (I don’t count my mortgage as debt). I will need one more balance transfer of ~$10K in June, then I’m home free.
BTW- my FICO 8 credit score was 782 last weekend. I’ve never had a late payment and have over 25 years of credit history.
The real secret is to play the game according to the rules. Staying in reasonably good health and not living beyond your means (eg. I drive a 13 year old car) also helps. Insure anything of value (my health is one of the most valuable things I have).
@baqui63 impressive feat… not a thing I’d probably be willing to try to pull off myself. Relying on a long series of introductory rates and balance transfers… heheh.
@InnocuousFarmer I use Quicken (and have done so since the late 1980’s or so). While I’ve gotten a lot more relaxed with it (I stopped tracking cash spending to the penny long ago and stopped tracking cash transactions of less than $50 a few years ago, other than in a very general sense) I tend to categorize all CC spending pretty closely.
When I do a new balance transfer for X months, in Quicken I set up X-1 automatic payments for a little ($20-$30) more than the first month’s payment and a final payment of the rest of the balance for the Xth month. I normally have three or four cards with no balance, so in the X-1th month I look thru their 0% offers and pick the one with the lowest APR, transfer things and repeat.
@therealjrn Decades ago, I’d borrow $20K-$50K for 12-24 months at 0% and get them to waive the fees, park the cash in a CD at 5-7% and pocket the interest. Shame that isn’t viable anymore but eh.
A 3% balance transfer fee for 18 months works out to an APR of 2% ((0.03/18)*12).
When I do one of these, I normally borrow a little less than the card’s limit, eg. my Discover has an $11K limit and the last deal was 0% for 12 months with a 2% fee. So I borrowed $10,750 with a $215 fee. The first minimum payment was $220 (2% of balance) so I set up a monthly automatic payment of $225. I’ll make eleven payments of $225 and a final payment of $8490. I won’t use the card for anything else until after that 12th payment is credited.
Having several cards almost maxed out does ding my credit score somewhat, but it is in the mid-to-high 700’s so I don’t care.
I have two other cards that I use to make almost all purchases over $3-5. Both are cash rewards cards and I take the rewards as statement credits unless they are offering useful gift cards at a better rate. These are paid in full every month, occasionally with balance transfers.
Citi Double Cash card (2% Rebate) pretty much only use this one now.
Chase Freedom, use to be my primary card, however got annoyed with the rotating bonus categories, so just went with the flat 2% offered above. Thought about trying to play the rewards game, but I never remember.
Store brand MasterCard…Was used for groceries, use to have fantastic rewards, but they changed, so haven’t been using.
Amex Bluebird (Prepaid) - Keep in car just in case I ever forget my wallet.
All set to auto-pay full balance on due date. (Except prepaid card obviously)
For those with cards that offer cashback rewards, what do you do with the rewards? I usually just apply them to my CC balance (FTR, I pay off my cards in full every month and pay zero fees or interest). Recently I cashed in a reward for an Amazon gift card to give to my kid. My annual reward on the Costco card just goes back to Costco.
@macromeh One of mine used trade you restaurant and store gift cards at about 150% the value of the cash back, so I took gift cards. Now just apply to balance.
@macromeh My “normal” use is statement credit or direct deposit cash back. However, sooooooometimes it’s a good deal to book travel thru your credit card company using the rewards points. I did that once. That’s about it.
@macromeh Discover lets you get gift cards at a discount price. My Visa card used to, but now they offer better 5% rewards instead. If I can’t get a special (gift card for less than face value, etc.) then I just take the money back, either statement credit or direct to the checking account.
Four. Two for business, two for personal use. I use one of the two for recurring “auto-pay” payments, and one for purchases. Makes it easier to spot irregular activity if all transactions don’t appear in the same statement.
BTW, each card is paid in full at the end of each month. Learn it, know it, live it people! Once you get that recurring credit monkey off your back, you’ll be surprised how much your budget frees up.
5, but I’m pretty much the opposite of a churner. A new card has to present a significant improvement over what I have for me to get it.
Quicksilver is my daily (1.5% back), Savor for restaurants (3%), AmEx Business SimplyCash Platinum for gas and wireless services (3% and 5%), Amazon Prime (5%), and Freedom for whatever categories are active (5%).
All rewards are applied to my statement balances each month before I pay them off in full. I’ve used credit cards for 15+ years and have never paid a cent of interest. The only time I carried a balance (at 0%) was for three months when I took on my ex’s debt after the wedding.
I usually end up with several hundred dollars of rewards each year in addition to all the other benefits of credit card usage.
@Kabn I was there up until last January. Then I got ripped off of what I’d saved for the job by a crooked contractor, the job still needed doing so I paid a legit contractor for it on credit in February. A month later my healthy dog took extremely sick and massive amounts of examination and medicine crashed my finances and still didn’t help. I lost him anyway. So in the course of a few weeks I paid out about 1/3rd my annual income, and it’s taken me a while to dig out. I was set to be clear this summer, but had another big financial setback when I had to unexpectedly install a new electric box and HVAC system a few weeks ago. If things go smoothly for a while I’ll be debt free (including the mortgage) by the end of the year. Fingers crossed for smooth sailing in the coming months and lots of art sales and pet sitting engagements to help fill in the chinks.
And that’s what credit cards are to me. A daily convenience, but also a safety net for emergency expenses for the house, car, and pets.
@Kabn I’ve got roughly the same cards you do, and same approach. My Amex is for gas and groceries. Wouldn’t object to picking up a 1.5% card as a daily driver. I use the Chase Freedom card for that.
I do let rewards accumulate, though. That’s maybe not the best thing to do, but it’s more fun.
@InnocuousFarmer The way I look at it (which is obviously not objectively better) is I want the rewards to simply save me money on a monthly basis. If I’m automatically cashing out $5-20 of rewards per card every month, I barely notice them. But whenever I accrue $150+ in rewards on a card due to some bonus, I sometimes get the itch to justify a purchase I wouldn’t normally make by telling myself I’m using “reward dollars.” I don’t usually succumb, but I like to remove temptation whenever possible.
I have friends who use mileage cards to save up for large-ish trips, but my personal preference is to keep it all cash-based to maximize flexibility. And because I put the “profits” from each overall monthly statement cycle in an easily-accessible account, I can use them for more considered fun/luxury purchases like the OluKai slippers I picked up yesterday.
@Kabn Yeah, that’s what I was thinking – your method better supports a more responsible approach to budgeting, where you actively decide to spend money on things, weighing dollars mostly similarly, instead of falling into the trap of saying “oh look, a separate pot of free money that I can spend frivolously.”
Then again, I think I remember reading something about it working the other way around. Back when Obama was dumping money into places, they were saying that returning money with lower taxes/withholdings was more stimulative (because of higher consumer spending) than a lump sum, but the lump sum (IIRC, from whatever article or podcast it was, Bush did this) was more popular because it was more visible. Apparently people tended to save it though (?).
For myself, when I get cash back, I usually have an impulse to sock it into some portion of my budget that is allegedly savings. Where I get in trouble more is when I have a balance in a store (gift cards, account credits) I have the urge to get that number to $0.
One annual fee… The IHG card. Which for a paltry 49 dollar fee gives you a room at any IHG property every year. My last certificate was cashed in on what would have been a 649 dollar room(not that my cheap ass would have paid that but a motel 6 would have been more than the 49 bucks) Quicksilver will be going away shortly (pointless to carry a 1.5 percent cash back card when there are 2percenters. And cap 1 sucks.) I churn to some degree and the only balance I ever carry is on Lowes at 0 percent. The citi card piles up rewards until I get a free month of utilities. The others I cash in when I need a treat or I am buying something I hate paying for. (Like paper towels. I don’t know why I object but I do.)
I’m not a churner… just have a lot of cards for different purposes. But yes, I have a problem.
@Collin1000 how much in annual fees do u pay if any
@communist No cards with an annual fee.
*Quicksilver 1.5% CB everywhere
*Chase Freedom 5% rotating CB
*Amazon Prime Visa 5% CB at Amazon, 2% on gas
*Amazon Store Card 5% CB (used for no-interest financing offers)
*Discover IT (5% rotating CB)
*Uber Visa Card (4% CB on restaurants, 2% CB online)
@Collin1000 Have the same no annual fee philosophy (haven’t found any that more than covered that fee) unless you include Costco Citi & SAMs Synchrony (crappy bank) club annual membership fees
Similar cards+
BTW, that Amazon Prime Visa also gives 2% back at drug stores & 3% on travel&restaurant.
A trick with Discover and others - check out the discounts they offer on gift cards - often 20-25% so you’re paying 80 cents on the dollar for the gift card… with reward dollars.
2 quicksilver mastercards(1.5% cash back with no annual fee)
1 credit union card(only 9%APR)
Well, I want to have at least one from each issuer, so that’s four right there.
I have zero, but not because I don’t trust myself. It’s more like, why would I spend money I don’t have?
@ninjaemilee we’re like unicorns. I’m glad banks have Visa backed debits, because cash only lifestyle is no longer possible
@ninjaemilee Here’s a few articles that explain why you might want to “spend money you don’t have”:
The advantages of credit cards
Credit vs. Debit Cards: Which Is Better?
@Coldrice counterpoint: https://www.daveramsey.com/blog/5-reasons-why-debit-is-better-than-credit
@ninjaemilee I was hesitant in opening a credit card for several years but I realized that having no credit history limits you in some ways. I wanted to make sure I built up credit so when I needed to open a larger loan (auto/house) I would be able to get better rates.
I don’t really want to have to play into the system but it seemed like a necessity to me. The plus side that is if you treat your credit card as if it were a debit card you can get a little more back via promotions and rewards.
@smyle Thanks for your counterpoint! Let’s go through them:
No interest.
If you pay of your balance every month you don’t have any interest. Rewards such as cash back, miles, or reward points are generally a trade off for potential interest if you miss a payment. If you setup automatic monthly payments and keep your balance to something you can afford it’s easy to ovoid interest.
Spend less.
That’s a fair point. I can understand the mentality of cash going from your bank account reducing spending. Even better is just buying everything with cash. Buying anything always feels more impactful when you have you count out each dollar bill for it.
However, as a counterpoint, it can be almost as risky as cash. If someone steals your debit card, it’s money straight out of your pocket.
No bills.
Automatic bill pay. I check my online statement for fraudulent charges and keep my balance to something I can pay off entirely every month. By the time you see a fraudulent charge on your debit card the money is already gone.
No sharks.
What? Sharks? Okay, some cards have annual fees and very high interest rates. However, there are many cards without annual fees that have great rewards. A credit card through your bank is often a great choice if your concerned about getting scammed by an “outside” company. I have one card with an annual fee, but the airline rewards make up for it and offset the cost. (no international transaction fees, free checked bags, earlier boarding on flights, air miles for free flights, etc.)
Dave approves.
This is just Dave patting himself on the back for making the four earlier points, which is fine, but I’m not sure why it’s a fifth point. As my counterpoint and summary I would say consider security and rewards.
@Krydon agree about building credit. Several years ago I started using a credit card for daily purchases and paying it off at the end of the month. I started with a measly $300 limit. Now they’ve bumped me up several times so I have a fairly substantial limit and my credit actually showed that I was responsible to make payments on time. It has helped me start the process of buying a house.
@Coldrice
@smyle Ah, it’s nice to hear some banks are very helpful with fixing fraudulent charges. However, you didn’t get your money back until it was resolved, right? With a credit card your money isn’t gone until you pay the bill.
With several different credit cards I’ve had, they have contacted me about strange charges. Usually it was me on vacation or buying something unusual. However, when there were actual fraudulent charges(several hundred dollars in jewelry) all I had to do was say it wasn’t me, confirm a few things over the phone, and that was it. They removed the charges and sent me a new card (the number was likely stolen by a skimmer). I was never out any money.
There are several ways credit card companies make money. Interest is one one of them, but there are enough people out there paying plenty in interest that they’re not going to try to “trick” you into paying interest. As I said, some some annual fees, but many don’t. Some will even waive the annual fee if you call them and say your going to cancel. Possibly the biggest is transaction fees. Every time you use your card they charge the merchant a fee to process the transaction. The fees vary, American Express has very high fees which is why many merchant don’t accept it.
Research indicates you spend less when you pay cash, however having a good credit rating saves you money in multiple ways too - in most states lower car insurance rates, may not have to pay a deposit on utilities…
Credit cards make money off of merchants in that they have to pay a fee as a percentage of your charge to the credit card company so the company makes money off of you even if you always pay your bill in full every month. Of course we all pay for that as merchants take that into account when they price things.
@Coldrice Actually I’ve had my bank’s fraud center (it’s a small town bank, so they outsource it) call me multiple times with potentially fraudulent charges. A few times it was just a strange, but legitimate (typically online) purchase. A few times it was fraudulent. In all cases, they called me, asked if it was legitimate, and took care of it on the spot. There was only one time they missed a fraudulent charge where I had to fill out paperwork.
The process was virtually identical to the times I had fraudulent charges on my credit cards, back when I had them.
@smyle Cool, that’s great to hear!
@ninjaemilee For some context, I’m a 26 year old whose only real line of credit is the student loan payment I make each month (or the extra I can afford to pay). I’m in a fortunate living situation right now where I don’t have any utilities or rent in my name. I guess I’ve just been apprehensive about taking a step towards a credit card since I don’t want to take on any more debt. Thank you everyone for your input and you’ve given me a lot to consider.
Churn, churn baby churn. (7, but I only carry 4)
3
Do you want the numbers on them?
@meh427 and your SSN, please.
I use credit cards as currency. I pay it off each time a purchase is made. I earn cash back at 5% or less but, more importantly, I enjoy the protection credit cards offer in added warranties and no liability when transactions don’t transact properly.
Used to only have one, but now use one online, and a second IRL.
My monthly Netflix charges still come in on an old credit card number that I changed after it was hacked. I shake my head at that.
Airline miles. That’s why. Everything goes on them…health, home, and car insurance premiums, groceries, heating oil, cable bill, etc. It adds up. I pay them off each month. Plus I get cost-free currency conversions for purchases made overseas. Later this year I am going to India for about $100 RT, using miles accumulated, mostly not by flying.
@Ambiverbal I get cruise miles and on board credits on my main card. I got it when I was planning a trip that included two back-to-back European cruises for five people. The cruise costs came to about $12k. The credit limit on the card started at $3k. So I made an agreement with the travel agent to pay off the amount in four payments a few days apart. I’d max out the card and pay it the same day (the others had already given me their share). As soon as the payment cleared on the card, I’d do it again, till it was paid off. I ended up with about $600 in onboard credits with the cruise payoffs and the bonus points for spending a certain amount in the first 90 days. Everyone was happy with that as I did all the complicated planning for the trip, so they were happy I got some benefit out of it. Now I use it as my everyday card and end up with a couple hundred bucks in ob credits when we cruise every couple of years. The interest rate is about 7%, no annual fee, and they tripled my limit.
I’ve got about 8, but it’s just for the benefits they give, not to carry a balance. Cash back, discounts, purchase protection warranties, travel benefits/protections. Not to mention if something fraudulently happens, it’s on the line of credit and not on my bank account.
I had a secured credit card to start building my credit, but I canceled that one, last year. I now have 1 credit card and a Home Depot charge account.
@TheCO2 As an FYI, I would never open up a Home Depot account again. It hurts your credit score – especially for Equifax.
As an example, you can see how Equifax shows my score lower than the other two companies.
When I read the details on how the score is computed, the negative factors are clear:
The $1,167 balance is normal for me and all 3 companies report that. I spend well over $2k each month but pay it off in full at the end of the month. But look closely at the #2 reason, “You have 1 account from personal finance companies.” THD stands for “The Home Depot” and I closed that card about 5 years ago but they still report it to Equifax every month so it doesn’t leave my record. It doesn’t show on Experian or Transunion so you can see that it’s giving me a negative hit on the score.
The same should be said for any store credit card. Be careful because those could show up as a finance company which is negative credit because people usually go to a finance company as a last resort when a bank or credit card will not approve them.
@cengland0 That’s interesting and I will keep that in mind. I only opened it because I needed a new lawn mower and I liked the idea of no interest for six months, but I guess that is how they get you.
When was the last time anybody here laid hands on physical currency?
@PocketBrain yesterday
@PocketBrain Right now, in my wallet
@PocketBrain The only use for cash that I can think of is buying lottery tickets, since in my state I’ve been told it’s illegal to buy them with a credit card. I can’t remember using cash for any reason other than lottery tickets in the past… very long time.
@PocketBrain I have it squirreled away…you know…for reasons
@Collin1000 you should be able to buy them with a debit card now.
yesterday and in my wallet right now.
@PocketBrain Last night. One friend chose to pay her part of the UberEats order with cash instead of Venmo. Weird.
@RiotDemon Not anywhere I’ve seen… Probably has to do with interchange fees on the card as well.
@Collin1000 my grocery store said I could pay with a debit card, but I haven’t actually tried.
@Collin1000 Illegal to buy lottery tickets on a credit card? That’s interesting because I know people do that because it’s called quazi-cash and my company’s credit card agreement charges the fees as if it was a cash transaction. Would cost you more in fees than the lottery ticket costs so I wouldn’t recommend it but I didn’t know any states made it illegal.
You can also buy chips in vegas with a credit card and those are quazi-cash transactions as well. Travelers Checks and Money Orders are also quazi-cash.
@cengland0 looks like it varies by state:
https://www.creditcards.com/credit-card-news/buy-lottery_tickets-credit_card-1273.php
@Collin1000 I found this comment interesting:
With the bank that I worked for, quazi-cash transactions like lottery tickets have the exact same transaction fees and interest as getting cash from an ATM.
Another note. When you buy a product with a credit card, you have a grace period if you pay your account in full each month. That means you don’t pay any interest on your purchases. However, cash advances have the interest start from the transaction date until it’s paid off. This is very tricky for banks because they will send you a statement that says you owe $100 and you pay $100 but there was some time from when that statement printed until the bank received your payment. Your next statement will have additional interest for those extra days.
I use my Marriott cc daily for rewards. I also have a Disney because of the kid, 2 from bank of America that pay bills for points, and one capitol one card for international travel.
I’ve had more in my life but lack of use has cause the creditor to cancel them. Had 7 or 8 to pay for my wedding 10 years ago. And had many store cards that have been closed. The wife now keeps the store cards open…aka banana republic.
I think I’ve had a dozen or so over the years, with the max of about 5 at any given time. It worked out well for many years, I was paying them off at the end of the month, getting my cash back, and thinking I was being really smart. Then I bought a couple of things I shouldn’t have, and kept getting further behind. This led to a “well screw it, one more meal out/Christmas present for the kids/night at the movies/whatever isn’t any worse than it is already” attitude.
Now 0: Working the Dave Ramsey plan. I still have some debt, but plan to have everything including my house paid off in about 5 years.
I love my Amazon card for all the points it accumulates, usually allowing me to get some extravagance I would never allow myself to get otherwise.
In the last year or so I switched to a Southwest Airlines card (my son goes to UofA) and with over 100K points, I’m gonna save some flight costs this year for sure.
You mean you aren’t supposed to use them up, throw away and open a new one?
If I count store cards as well as credit cards, I have 15 or so. None have annual fees and I have no idea what interest rates they charge (I haven’t paid interest on a credit card in decades).
Technically, I’m not a churner because I’m not chasing rewards, but rather 0% balance transfers, tho maybe that counts.
I carry a balance on several cards (four at present, totalling about $44K down from a high of about $55K), but only at 0%. With balance transfer fees, I average an APR of ~2.5%; the max I’ve ever paid for any single balance transfer is 4%.
Basically, I decided to use CC to finance my divorce (child support) and tuition, primarily because using CC balance transfers is a LOT! cheaper than educational loans with the added benefit that CC debt does not survive bankruptcy, if the shit hits the fan.
Now that @miraclewhispers (daughter unit 2) is done with school, I expect to be debt free before Summer 2019 (I don’t count my mortgage as debt). I will need one more balance transfer of ~$10K in June, then I’m home free.
BTW- my FICO 8 credit score was 782 last weekend. I’ve never had a late payment and have over 25 years of credit history.
The real secret is to play the game according to the rules. Staying in reasonably good health and not living beyond your means (eg. I drive a 13 year old car) also helps. Insure anything of value (my health is one of the most valuable things I have).
Or maybe I’ve just been lucky.
@baqui63 impressive feat… not a thing I’d probably be willing to try to pull off myself. Relying on a long series of introductory rates and balance transfers… heheh.
@InnocuousFarmer I use Quicken (and have done so since the late 1980’s or so). While I’ve gotten a lot more relaxed with it (I stopped tracking cash spending to the penny long ago and stopped tracking cash transactions of less than $50 a few years ago, other than in a very general sense) I tend to categorize all CC spending pretty closely.
When I do a new balance transfer for X months, in Quicken I set up X-1 automatic payments for a little ($20-$30) more than the first month’s payment and a final payment of the rest of the balance for the Xth month. I normally have three or four cards with no balance, so in the X-1th month I look thru their 0% offers and pick the one with the lowest APR, transfer things and repeat.
@baqui63 Cheese&Crackers I love being mature enough to understand this.
I question the transfer fees, but according to the narrative, perhaps fee free?
On the whole, though, those halcyon days of balance transfers and working the arbitrage are gone for now.
@therealjrn Decades ago, I’d borrow $20K-$50K for 12-24 months at 0% and get them to waive the fees, park the cash in a CD at 5-7% and pocket the interest. Shame that isn’t viable anymore but eh.
A 3% balance transfer fee for 18 months works out to an APR of 2% ((0.03/18)*12).
When I do one of these, I normally borrow a little less than the card’s limit, eg. my Discover has an $11K limit and the last deal was 0% for 12 months with a 2% fee. So I borrowed $10,750 with a $215 fee. The first minimum payment was $220 (2% of balance) so I set up a monthly automatic payment of $225. I’ll make eleven payments of $225 and a final payment of $8490. I won’t use the card for anything else until after that 12th payment is credited.
Having several cards almost maxed out does ding my credit score somewhat, but it is in the mid-to-high 700’s so I don’t care.
I have two other cards that I use to make almost all purchases over $3-5. Both are cash rewards cards and I take the rewards as statement credits unless they are offering useful gift cards at a better rate. These are paid in full every month, occasionally with balance transfers.
All set to auto-pay full balance on due date. (Except prepaid card obviously)
@MrMark
many stores now do apple pay/ android pay so if you forget your wallet you can still pay with your chase card/citi card via phone tap
For those with cards that offer cashback rewards, what do you do with the rewards? I usually just apply them to my CC balance (FTR, I pay off my cards in full every month and pay zero fees or interest). Recently I cashed in a reward for an Amazon gift card to give to my kid. My annual reward on the Costco card just goes back to Costco.
@macromeh Cash them in for a statement credit as well. I’m not an exciting person.
@macromeh One of mine used trade you restaurant and store gift cards at about 150% the value of the cash back, so I took gift cards. Now just apply to balance.
@macromeh My “normal” use is statement credit or direct deposit cash back. However, sooooooometimes it’s a good deal to book travel thru your credit card company using the rewards points. I did that once. That’s about it.
@macromeh Discover lets you get gift cards at a discount price. My Visa card used to, but now they offer better 5% rewards instead. If I can’t get a special (gift card for less than face value, etc.) then I just take the money back, either statement credit or direct to the checking account.
Four. Two for business, two for personal use. I use one of the two for recurring “auto-pay” payments, and one for purchases. Makes it easier to spot irregular activity if all transactions don’t appear in the same statement.
BTW, each card is paid in full at the end of each month. Learn it, know it, live it people! Once you get that recurring credit monkey off your back, you’ll be surprised how much your budget frees up.
5, but I’m pretty much the opposite of a churner. A new card has to present a significant improvement over what I have for me to get it.
Quicksilver is my daily (1.5% back), Savor for restaurants (3%), AmEx Business SimplyCash Platinum for gas and wireless services (3% and 5%), Amazon Prime (5%), and Freedom for whatever categories are active (5%).
All rewards are applied to my statement balances each month before I pay them off in full. I’ve used credit cards for 15+ years and have never paid a cent of interest. The only time I carried a balance (at 0%) was for three months when I took on my ex’s debt after the wedding.
I usually end up with several hundred dollars of rewards each year in addition to all the other benefits of credit card usage.
@Kabn I was there up until last January. Then I got ripped off of what I’d saved for the job by a crooked contractor, the job still needed doing so I paid a legit contractor for it on credit in February. A month later my healthy dog took extremely sick and massive amounts of examination and medicine crashed my finances and still didn’t help. I lost him anyway. So in the course of a few weeks I paid out about 1/3rd my annual income, and it’s taken me a while to dig out. I was set to be clear this summer, but had another big financial setback when I had to unexpectedly install a new electric box and HVAC system a few weeks ago. If things go smoothly for a while I’ll be debt free (including the mortgage) by the end of the year. Fingers crossed for smooth sailing in the coming months and lots of art sales and pet sitting engagements to help fill in the chinks.
And that’s what credit cards are to me. A daily convenience, but also a safety net for emergency expenses for the house, car, and pets.
@Kabn I’ve got roughly the same cards you do, and same approach. My Amex is for gas and groceries. Wouldn’t object to picking up a 1.5% card as a daily driver. I use the Chase Freedom card for that.
I do let rewards accumulate, though. That’s maybe not the best thing to do, but it’s more fun.
@InnocuousFarmer The way I look at it (which is obviously not objectively better) is I want the rewards to simply save me money on a monthly basis. If I’m automatically cashing out $5-20 of rewards per card every month, I barely notice them. But whenever I accrue $150+ in rewards on a card due to some bonus, I sometimes get the itch to justify a purchase I wouldn’t normally make by telling myself I’m using “reward dollars.” I don’t usually succumb, but I like to remove temptation whenever possible.
I have friends who use mileage cards to save up for large-ish trips, but my personal preference is to keep it all cash-based to maximize flexibility. And because I put the “profits” from each overall monthly statement cycle in an easily-accessible account, I can use them for more considered fun/luxury purchases like the OluKai slippers I picked up yesterday.
@Kabn Yeah, that’s what I was thinking – your method better supports a more responsible approach to budgeting, where you actively decide to spend money on things, weighing dollars mostly similarly, instead of falling into the trap of saying “oh look, a separate pot of free money that I can spend frivolously.”
Then again, I think I remember reading something about it working the other way around. Back when Obama was dumping money into places, they were saying that returning money with lower taxes/withholdings was more stimulative (because of higher consumer spending) than a lump sum, but the lump sum (IIRC, from whatever article or podcast it was, Bush did this) was more popular because it was more visible. Apparently people tended to save it though (?).
For myself, when I get cash back, I usually have an impulse to sock it into some portion of my budget that is allegedly savings. Where I get in trouble more is when I have a balance in a store (gift cards, account credits) I have the urge to get that number to $0.