How To Use Credit Cards Wisely

Credit cards often get a bad rap due to their high interest rates and some people’s tendency to rack up thousands of dollars in credit card debt. However, if you use them properly, they can actually be a very useful tool. Renting a car, booking flights and ordering online are all things that would not be possible without a credit card. Here are some guidelines for making wise decisions about your credit card use.

Always pay off your balance in full. This is the number one rule of using a credit card and means that you should not be buying more than you can afford. Just because you have access to funds through your credit card, that doesn’t meant that you have the cash to cover it and not paying off your balance each month means that you’ll start incurring interest charges on any balance you carry. A good rule is to not charge anything you wouldn’t otherwise buy with cash. If you can’t pay in full one month because of an emergency, at the very least, you must pay the minimum and should definitely aim for more than that.

Consolidate your debt to pay it off on time. Credit card debts can spiral out of control if you don’t follow rule #1 above. If it does, and there is no way that you are going to pay off this debt in full, consider consolidating your debt.

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It’s Not Just Big Things That Can Lead To Financial Problems

Many people associate the onset of financial problems with a big event.

A job loss.  A major health issue.  A catastrophe.

These are all major events and could very well lead to financial troubles.  However, it’s not just the major things you have to watch out for and prevent against.

In fact, it’s quite the opposite.  I’m guessing that a majority of people in financial trouble got that way without having any major things.  Instead, it was just a culmination of little things that added up without them knowing.

My Work Computer

Let me use my work laptop as an example.

I started here in 2006 and was granted a brand new laptop.  As with all computers, it worked great but within a few years was showing it’s age.  It had gone through a couple of batteries, it was getting slower, had a cracked edge around the outside of the case, and just other general problems that come about from a device that’s used all the time.

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Getting Used To A New Credit Card

We recently signed up for the American Express Costco credit card.  The main reason is that you get 3% cash back on gasoline purchases. With the camper coming out of storage recently and planning a few trips, we know that we’ll be spending quite a bit on gas this summer, and looked for a card that would do the best to offset some of those costs.

The Costco card was definitely the right choice.  I’m all about getting cash (even though Costco makes you get the cash at their service desk, that’s fine with me) and not any sort of points or mileage or anything like that.  I know that some rewards might pay more at first but they tend to lower the rate after a few months or move you to rotating categories.  For gas, I wanted something that didn’t do much changing, and so far as I could tell, the Costco card has been offering the 3% back for a number of years now.

Still, this is our first true American Express card, so there were a number of things that were different when it came time to paying our credit card.

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Looking For A Good Reward Credit Card For Gas Purchases

At the end of last year, I reported that we were the proud owner of a new camper which will become our main source of vacation time starting this upcoming summer.

A few days ago, I started having a mild panic attack when I looked at the gas price situation and some of the surrounding news.  In Michigan, gas prices have gone up around 30 cents over the past couple of weeks.  It seems every year the gas price rise starts earlier and earlier in the year, and the projections get a bit higher for the summer projections.

This year, people are already talking about $5 gas.  Thinking about the cost associated with towing a camper, it seems that any ‘savings’ we are getting on paying for cheap campground accommodations would be negated by higher gas prices.  The vehicle we tow with gets about 20MPG regularly, and I’m assuming that will drop significantly given that we’ll be towing another several thousand pounds.

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5 Ways To Avoid Phishing Scams

My wife got an e-mail over the weekend saying that her Citi Dividends credit card had been ‘restricted from use’ due to ‘suspicions about the address on file’.  It then gave the address on file.

It wanted her to immediately log into her account and was nice enough to give her a link to do so.

The entire e-mail looked legit.  Except that none of it was.

She had me go look at it, since I do all the work with our banks and credit cards and such.  I took one look at the e-mail and realized it was an attempt at phishing.  The link that was provided for logging in did not point to Citi’s website.  It pointed to a different site that I’m sure would have happily collected any login information we would have entered, and used it for illicit purposes.

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I Got A Citi Dividend American Express Card Without Asking For One (But It’s OK!)

I saw a post a few weeks ago on Consumerism Commentary where Flexo got a credit card that he didn’t ask for and really wasn’t all that happy about it.   When Citi sent a replacement credit card for his Dividend MasterCard, they also sent an American Express card.

I read the story with interest, because both my wife and I hold Dividend MasterCards and use them as our primary credit cards, turning down other cards in favor of the cash back that our Dividends card gives us. Most of Flexo’s readers that left comments were similarly put off by getting a card ‘forced’ without asking.

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The Credit Cards Of The Rich And Famous

When it comes to money matters, being rich and famous definitely has its advantages. You can afford the best of everything, which is great.  On top of that, your credit card unlocks the door to even more privilege.  Many of us struggle to make ends meet.  However, the rich and famous do not need credit cards for bad credit when times get hard.

Additional Rewards

Royalty, celebrities and entrepreneurs are able to access a range of credit cards that provide many advantages.  These include additional rewards and bonuses far beyond money-off vouchers or discount deals.

These credit cards themselves are actually a status symbol.  One cannot simply apply for one as you would for any normal card.  These are not credit cards that are used to improve credit scores.

Instead, you are invited to join the club of exclusive credit card holders. The most rare and prestigious credit card is rumored to have only 100 holders.  That’s absolutely incredible.

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Did I Really Just Add Two More Credit Cards To My Wallet?

I’m all about keeping it relatively simple when it comes to spending.  For the most part, I use two cards for purchases, a debit card that draws out of our bank checking account, and a credit card that I use for various spending categories, which pays 1% cash back.

It works well.  It is simple.  It allows me to keep on top of things on a daily basis if I so choose (I do!).

So, why on earth would I willingly add two more credit cards to the fray?   Why complicate my life?  Have I lost my personal finance mind?

Fear not, my sanity is still in check.

The reason is simple:

Five percent.

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Don’t Turn Something Good Into Bad

There’s a guy that I work with from time to time.  We don’t sit near each other or work directly together, but our paths cross every now and then.  He’s a nice enough guy.  He seems good at what he does.  He’s easy to work with.  Yet I can’t stand being around him.

Why?

He wears too much cologne.

It literally gives me a headache to be in the same room with him for more than fifteen minutes.  There’s nothing wrong with the particular cologne he wears, he just puts way, way, way too much on.

He turns something good into something bad.

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Should I Sign Up For A Lowes Credit Card?

I’m not one that’s much for signing up for individual store credit cards.  They often hurt your credit score, plus it’s one more thing to keep track of.  If you’re a creature of habit that knows what bills you pay every month, you might forget all about making a payment if you don’t use the card regularly.  This could be devastating to your credit score.

Despite these risks, I’m thinking about getting a Lowe’s credit card.  Right now, my Citi Dividends credit card has a 5% cash back on all home improvement store purchases.  But that’s only good for three months at a time, and is set to run out June 30th.

Now, Lowes’ has recently announced that for all purchases made on a Lowe’s card, you get a 5% discount on your purchase.

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