Started canceling credit cards

[dennymal]

As everyone on this sight have said the key is to pay it off every month. Here is my last months rewards on my business credit card. This is not a typical month as far as charges but this shows how reward dollars add up.

5468.00 John Deere dealership-Oil- parts and a repair on 8000 series tractor

54.68 in rewards dollars 1% of purchase

3909.00 new windows for the house

3% on 2400.00 per month on Home improvement-gas-office supplies 1% after

72.00 in rewards dollars on first 2400.00

15.09 on ballance

Groceries, gas an additional 436.00 at 1%

4.36 in rewards

Total rewards for month 146.00 Not to shabby on stuff you need to buy anyway. Next month I am going to buy shingles so i should get 3% back on that purchase

[WCMO]

In addition to the rewards benefits, it's really a simplifier to use the credit card for essentially every purchase possible, and pay it in full each month -- you don't have to carry/use as much cash, you don't have to use and keep track of so much in your checkbook, you get a statement of everything every month, you get a little time value on your money (and free use of someone else's money) by paying just once a month, etc.  I keep just a few cards, all have some rewards benefits, all have fairly high limits in case needed, and all are paid in full with every billing.  I reserve 1 card for that is only used for iPhone/internet types of purchases.  I use 1 card essentially all the time.  And, I have 1 card that is my backup/extra, in case there's any problem with the other 2.  That's it.  If any of them decide to charge a monthly/annual fee, they're out.

[dennymal]

Another benny like my sons found out its a good way to build credit while going to college. An excellent credit score gives you access to cheaper interest on buying a home, car etc.

[WCMO]

Farmerguy -- I don't think it's about "defenses" -- it more a frame of mind.  Credit cards are essentially a simple way of borrowing money, except that there's a grace period to pay it in full with no charges.  Therefore, using it as a cash vehicle, paying in full monthly, is just good business.  Otherwise, if you wouldn't borrow money to buy something, then don't use the credit card.  And, even if you would borrow the money, then it's wiser to line up the money elsewhere (cheaper), and use the card only as a cash vehicle for the interim period to take advantage of the grace period.  On the other hand, I have known people that maintain a balance on their credit card all the time, and pay only the minimum payment -- the ones that do this on purpose obviously have zero self-control, zero financial expertise, and probably limited common sense.

Several years ago, there were alot of credit card offers for -0- interest rate for 6 months to a year, pay only minimum monthly payment.  Haven't seen any of these for several years.  I totally operated on interest-free money for a few years.  The main thing on those was again, they're a vehicle for cash flow, money turnover, to be paid in full at end of interest-free period.  I think many people saw these as easy money, and spent the money without considering how it would be repaid, then got a surprise, refinanced against their house, couldn't make the payments on the house, etc.  It's only a trap if you step into it.

[tree fmr]

Also when i rent a car the cc covers the insurance. Saves on average $25 per day. Add in the 1% back for the rental and not too bad of a ROI. agree the key is do not carry a balance.

[Husker-J]

Good point on some of the benefits of a credit card.   I have a CC that I purchase all my electronics through, because in addition to the rewards points (yea, not cash back, but points I can at least use) the CC company backs every electronics purchase I make with a 100% no-hassle guarantee.   Only used it once, in over 10 years, but they mean it when they say no hassle guarantee.

[Shaggy98]

I've got one CC but it's been years since I've used it. Since the onset of debit cards, I just haven't seen the need of a CC.

Had a few days of business travel awhile back and my company requires that I use their corporate card. All I can say is what a POS. I would much rather pay for all my expenses out of pocket and be reimbursed later.

[kraft-t]

If you don't have the discipline to manage the cards you should not have them. I have three cards an only one of those gets much use. I haven't paid an interest charge to a CC company in over a decade. In fact they are on automatic billing at my bank account.

One card is not enough because at some time or another your card may be rejected and you need another to fall back on. We buy alot of stuff on credit card and do get significant cash rewards from the company. But primarily it is the convenience of not paying cash and getting a copy of all transactions. Errors are convenient to correct with the card accounts.