Hey peeps, it’s Johnny! You know, that other person that writes all of the boring, no-nonsense posts around here. Wait, why is your cursor moving toward the “Exit” button? Hey, stop! Just lend me your eyes for three minutes. So Joanna’s been running the show the last few weeks like a champ while I’ve been grinding away at the 9-5. Life’s good, work’s good, bank accounts are good-ish. No complaints from this guy.
Here’s a brief background on our “It’s complicated” relationship with credits cards. We use them. There ain’t no cash-only business happening in this house. For those firmly in the cash-only camp, you might want to sit down for this next revelation: we use them for nearly every.single.purchase. Our recent trip to NYC was the first time I was forced to visit an ATM and carry cash in almost a year.
However reckless all of this may sound, I can assure you that when it comes to credit cards, Joanna and I know we’re packing some dangerous heat in our wallets. We were fortunate enough to never actually carry any credit card debt, but we’re well aware credit cards are the gateway drug for many a Debt Monster victim. For that very reason, we follow some hard and fast rules when it comes to plastics. And by playing by those rules, we’re able to make it rain (or at least sprinkle) with rewards.
Never, Ever, EVER Carry A Balance
This is the cardinal rule. If you’re unsure if you can keep it, don’t get near credit cards. We never use credit cards as a line of credit — they’re essentially our debit cards. We’re accountable for each and every cent at the end of the month. I’m borderline OCD about this, so sometimes, I’ll check and pay off our balances three or four times a month. And at the beginning of every month, I make one final payment on all of our cards before calculating our net worth. We start every month with a zeroed out balance. Clear conscience, full credit card payment, can’t lose. I think that’s how it goes.
The Budget Rules All
Credit card companies want you to think that every time you swipe their fancy card, you’re spending their money, not yours. How lovely that they would be so kind to buy pay for this glorious feast of Taco Bell Doritos Locos tacos. All of that is wrong — minus the tacos. Those are always right. That money is coming out of your pocket! If that’s not what you think every time you swipe a credit card, cut them up now. We make it a point to enter every transaction — credit card or otherwise — into our budget as soon as humanly possible. A credit card isn’t a “Get Out of Jail” card for our budget. Then what’s the point of using them, dumbface?! you may be thinking. Actually, none of you are thinking that because I read every single one of your comments, and that’s just not something you’d say. But if you’re thinking something along those lines but without the third-grade lexicon, read on.
The first reward for using credit cards (responsibly) is… rewards! Imagine that! For the last five years, our primary reward focus has been airline mile rewards. Flying on one of those big birds in the sky ain’t cheap, and if it weren’t for our credit card rewards, we probably wouldn’t have left the ground. We definitely don’t spend more in order to acquire more miles, but I have been known to pounce on some awesome credit card promotions. Here’s an article we recently wrote on DailyFinance about how we’ll fly free for the next two years.
I know some financial gurus (*cough*Dave Ramsey) would have you believe that your credit score doesn’t matter. But the truth is that having a good credit score is pretty helpful. Every time we’ve applied for an apartment rental, each of us had our credit checked. And since we follow our rules of paying down our balance every month, our credit scores are good. When we buy a home someday, having a strong credit score will play a huge role in landing us a lender and a more favorable mortgage rate. That’s what’s up.
So those are the rules of the credit card road. If it any time we stop keeping those rules, we do not pass Go, we do not collect our rewards, and we put our credit cards into a blender. And then we scatter the plastic ashes in some random aisle at Target, because that seems fitting.
What’s your credit card philosophy? Do you use them? Do you curse them like the plague? What are your rules and rewards?