Quote:
Originally Posted by JSH
Why are you making payments a couple days later? That sounds way too complicated.
I do the same thing as Redpoint. I use the card and have the the payment set for autopay from my checking account. Once a week I go into Mint and check my transactions to see if anything looks funny.
While rewards are nice the real money to be made is in the sign up bonus. We generally do 2-3 new cards a year for the bonus. The current card is a United Visa that gives 60,000 miles if you spend $3,000 in 3 months. That is roughly $1,000 in airline tickets. We don't bother with a card unless it pays at least $500 in a signing bonus. We cancel the card after the signing bonus pays out.
We also each have a Chase card that we keep to establish a long credit history for our credit ratings. Those each have a small charge per month to keep them active and again, that bill is on autopay.
Managing credit is important in the USA. Lots of things seemingly unrelated are priced differently based on credit rating. (Like insurance rates)
Luckily the rules for managing credit are pretty easy.
1. Pay your bills on time - every time (35% of score)
2. Keep your credit card balance low (Don't use more than about 30% of your available credit) (30% of score)
3. Establish a long credit history. (Keep at least one card basically forever) (15% of score)
4. Use different types of credit. Credit cards, auto loans, mortgage. (10% of score)
5. Keep your credit inquiries low (don't let people run your credit unless they need to) (10% of score)
#4 is the only thing that could cost someone money if they took a loan they didn't need to boost their score. Luckily it is only 10% of the total score so someone can have excellent credit without it. (740 or better)
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All of our major life purchases have been paid off for years. We don't carry any debt beyond 30 days, i.e. the credit cards are paid in full each month. (Awfully nice of those folks to give us those short term loans interest free!) Even so we do not have an ideal credit rating. Why? Something you didn't list. "Payment history." We no longer make regular payments on any outstanding debt, such as a car payment or mortgage.
Moral: the credit folks don't like people who don't carry debt.