Comments on: Credit card use – my thoughts

By: Jacob

Jacob — Sun, 10 Jan 2010 17:19:14 +0000

Sorry again got it wrong
Correction in my above post:
By NON RECURRING expenses, I meant VARIABLE expenses.
By RECURRING, I meant FIXED expenses

By: Jacob

Jacob — Sun, 10 Jan 2010 17:18:12 +0000

Correction in my above post:
By NON RECURRING expenses, I meant FIXED expenses.
By RECURRING, I meant variable expenses

By: Jacob

Jacob — Sun, 10 Jan 2010 16:22:18 +0000

@Bob,

Nice blog. I really enjoyed reading many articles. Incidentally, I have the same approach you have in paying bills – 2 days a month (when I get paid -one after 1st and the second one after 15th) and tracks using a spreadsheet. btw, thanks for your article on having multiple accounts with ING Direct for different savings categories. I have been thinking for a while how good it might have been if banks provided the option for users to create sub-categories in their online account (linked to one checking account). Finally I created two checking accounts with the same bank and linked to each other. I transfer online a fixed amount of money to one account on my pay day. And my goal is to meet all normal monthly expenses using that fixed amount. And I can roll-over unused amount to the next month:-)

As part of New Year finance clean up, I made some changes on how I use my credit card. We charge all NON RECURRING items (gas, food, groceries, shopping, household items) on a single credit card. All recurring expenses (rent, car loan, utilities, cell etc.) get paid via Auto-Pay or Free AutoBill pay from my CHECKING account. For ALL non-recurring monthly expenses (normal expenses) I budgeted 800 dollars per month or 400 dollars per 15 days (for just me and my wife). The sole credit card we use for non-recurring expenses, I reset the balance to ZERO on 15th and 30th of every month (and I just try to be under $400 each time I make the payment). I do have subcategories for my budget; but I really care don’t as long as it is within 400. Had some early expenses for this month; so I have only $75 left till 15th. Probably I will not fill my gas tank full; but only enough till I can reach 15th

All these would not have happened, had I not got into debt! I still have credit card debts to pay off and as per my current schedule (fixed amount), God willing, I will pay off the cc debt and auto loan by end of next year.

By: Becoming debt-free with Dave Ramsey’s plan

Becoming debt-free with Dave Ramsey’s plan — Sat, 26 Dec 2009 18:02:45 +0000

[...] went as far as to get payday loans or buy stuff from rent-to-own places. My main problem was credit cards. The kid inside me always said, “I want it now!”. The kid usually won and I ended up [...]

By: Bob

Bob — Tue, 20 Oct 2009 03:00:09 +0000

@Jennifer,
if you have had the credits a while, and are concerned about having a good credit score, I would probably keep them open. Having cards with a long history is helpful…

By: Jennifer

Jennifer — Tue, 20 Oct 2009 00:28:56 +0000

I have two credit cards (one will be paid off by the end of next month) that have balances and about 3 others that don’t. After I get my cards paid off (hopefully by the end of 2010), I don’t plan on using them again. It is just too easy to put a “small” purchase on them that you plan to pay off at the end of the month. Then, when you get the bill, you find all of those small purchases added up to a larger bill then expected. As you said, a person who is very disciplined will probably not have this problem, but I don’t want to take the chance.

Quick question that is off topic a little:
After I get my cards paid off, is it better to keep them open with no balance, or just close them? I’ve heard that having a large gap between what you owe and what is available can help your credit rating, but I don’t know if that is true. Anyone know?

By: Jason @ One Money Design

Jason @ One Money Design — Sat, 11 Jul 2009 13:59:08 +0000

Bob, great discussion topic.

If you listen to Crown Financial Ministries and Howard Dayton, you’ll hear it’s okay to have one credit card, if paid off each month. Dave Ramsey won’t go there. He leans heavily on the side of no credit cards because it’s like playing with fire in that you’ll eventually get burned (we’re all human and can fall into temptation).

Our family has one credit card. I think it does relate to your ability to manage wisely and whether or not you have a steward’s mindset. If someone continually has trouble paying it off each month or easily tempted with instant gratification, it’s probably not a good idea to have the card.

We use the card out of convenience and never unless we know we have the cash to pay it off immediately or in the next coming paycheck. Sure, the next paycheck may not come, you never know, and that’s why it’s not used for items outside our monthly budget.

By: Tom @ Canadian Finance Blog

Tom @ Canadian Finance Blog — Fri, 10 Jul 2009 17:10:57 +0000

I voted for “pay off the balance each month”. I use my card for the rewards and to not need to keep such a close eye on my chequing account every purchase.

By: Eden

Eden — Tue, 07 Jul 2009 18:48:15 +0000

I’m in the no-credit-card-only-debit-cards camp. I don’t see any reason to change that either.

The only thing that tempts me is an Amazon.com Visa since I shop there so much I’m sure the points would add up quickly. However, I don’t have any plans of getting a credit card any time soon and probably won’t again.

By: Darrin

Darrin — Tue, 07 Jul 2009 17:36:20 +0000

We use the credit card for almost all of our monthly expenses. What I like about it is that if it gets lost or stolen we are only responsible for the first $50.00 that someone else charges. Unless the laws have changed, someone could wipe out your checking account if the same thing happens with a debit card leaving you with very little recourse.
Do we spend a little more each month? We probably do but it gets paid off each month. We also get a small percentage back every quarter.
We are what the credit card companies call dead beats.

As for late fees and over charges, there is some sense of personal responsibility.