Using your credit card for the points? Don't make payments too soon!

[freebeard]

freebeard, why are we talking about your eventual demise?

Ya gots me.

freebeard is of the tinfoilhat in normal person disguise type, or is it normal in a tinfoilhat disguise?

Either the Gooberment is going to know too much and disappear us, or AI is going to know too much and disappear us.

Lately more of a 304 stainless steel type.

Either/or statements NOT if/then statements NOR exit. This means something. ???

[Xist]

Cheers, freebeard:

https://www.youtube.com/watch?v=dgQ5_SwwWts

I hope that it suggests cool tinfoil hat videos like it did for me. It showed me two Linus videos.

[wdb]

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)

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.

[Fat Charlie]

Credit cards aren't interest free loans, the interest is just hidden in fees that are themselves hidden. They make their money every time you use the card, and stores just roll that into the price of everything. Now that stores are allowed to have different prices for cash and credit, you get to see how interest free the card really is.

Luckily, most places don't do that, so card fees are rolled into your price even if you pay cash. That makes credit, especially rewards cards, a really good move. Regular cards give you convenience and some benefits in return for those fees you can't get out of paying even if you use cash, and rewards cards let you claw back some of it. Using credit means having a buffer that you don't have to pay for: I can get to my savings, but they're not the most liquid. I don't have a box of cash buried in my backyard- my kids have more cash in shoeboxes in their rooms than I have in my pocket. But I've got a ton of purchasing power in that pocket if I really need it.

[JSH]

Originally Posted by wdb

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.

Payment History" is the same thing as "On-Time Payments" or as I said - Pay your bills on time - every time.

No you won't have ideal credit because you only have one type of debt. Credit history is based on taking credit and the paying it off on time. It really is that simple. Closed accounts (good or bad) only stay on your report for 7 - 10 years. If you wanted to boost your credit history there are lots of options for 0% financing on just about anything big or small.

You should have good credit though and everything I've read and been told once you get to 740 going higher doesn't matter.


My wife an I have identical credit history besides one thing. I leased the Spark for $100 a month in 2016 and she did not. Everything else is in both of our names. That car lease bumped me to 820 while she is at 800. Her credit history is based on credit cards and the mortgage. We haven't had any other types of credit in the past 10 years. Student loans and car loans are all older than that. That is why we are both are careful to keep that one old credit card even though the rewards aren't great and we hardly every use it. As long as it stays open and is reported each month it says on our credit report.

I'm sure you know you can check your credit history for free once a year at annualcreditreport.com

[JSH]

Originally Posted by Fat Charlie

..... Using credit means having a buffer that you don't have to pay for: I can get to my savings, but they're not the most liquid. I don't have a box of cash buried in my backyard- my kids have more cash in shoeboxes in their rooms than I have in my pocket. But I've got a ton of purchasing power in that pocket if I really need it.

I was the same way until April 27, 2011. I was living in Alabama and we got hit by a Supercell that spawned hundreds of tornadoes. We had some weak ones in the morning that I didn’t think much about until we went for lunch and couldn’t find a restaurant taking cards. We were all in or 20’s and 30’s and no one had any cash. The major tornadoes came through that afternoon and evening and caused massive damage all over the state and surrounding states. Cell networks and ATMs were down for days and we reverted to a cash economy for those that had it.

Since then I’ve kept some cash in the gun safe and $100 in each go bag that we keep in the cars.

We don’t have tornadoes here but we have a 40% chance of a 8.0 or larger earthquake in the next 50 years. Something like that would take down electronic payments for weeks or months.

[Fat Charlie]

Gas and groceries are pretty much the only things I need to buy in meatspace to keep things running. I've got a pantry and keep some cash available, so I can keep running in any reasonable disruption. I just don't do the "keep six months of living expenses on hand" thing.

One of my cards has no rewards but is pretty big, so I keep it alive by having one small recurring bill autopay from it.

[JSH]

Originally Posted by Fat Charlie

Gas and groceries are pretty much the only things I need to buy in meatspace to keep things running. I've got a pantry and keep some cash available, so I can keep running in any reasonable disruption. I just don't do the "keep six months of living expenses on hand" thing.

One of my cards has no rewards but is pretty big, so I keep it alive by having one small recurring bill autopay from it.

We have 6 months expenses set aside as an “emergency” fund in a combination of savings and CD. I don’t want that money tied up in investment that might need to be sold in the middle of a recession. The last time we might have needed to tap it was in 2008 / 2009 when the company I worked for went bankrupt and shut down. Not a time to sell