Credit Card Stress Free....What does it takes?

[DI]

If you are credit card stress free, besides paying in full monthly, what do you do to stay that way?

Since 2004, I have been stress free from credit cards.  The things I do to stay that way:

1.  Receive all online statements

2.  Check accounts daily

3.  Pay in full

4.  Check my checking account before making credit card payments

5. Don't rely on the deliverance of statements 

6. Set due date around the same time for all cards.

7.  Budget

8.  Don't charge what I cannot afford to PIF within a month

Message Edited by DI on 01-10-2010 07:05 PM

[Anonymous]

beautiful.. Thats exactly what I'm striving for this year. I have about 600 left of a balance that I will pay this week and im going to go interest free from now on!

Good rules to play by. Well its actually common sense really.

[Watchmann]

Pretty much the same thing.  I also pay the account electronically immediately after it closes, I never wait until it gets close to the due date.  That way I can make sure the payment gets credited well before it would be late.

I also have all my income, and upcoming living expenses (with placeholders for $X,XXXX / month for CC charges), scheduled out on a monthly basis for at least the next year.  I can then monitor if I'm gaining or losing against that budget as time goes on.  All the running credit card balances feed into the system and reduce the balance available for that month.  So if I've burned through 3/4 of the CC budget in the first ten days I know we have to adjust spending for the remaining of the month. 

[Anonymous]

All excellent tips, but remember that as important as it is, credit is only part of a larger picture. You should strive to be free of financial stress, which includes the advice given above plus the following:

Maintain an emergency savings account that will cover all of your living expenses for at least 6 months.

Take advantage of your employer's 401(k) or 403(b) plan, if one is available. Make sure that you contribute enough to qualify for any matching employer contribution. Contribute more if you can.

Bank at least 10% - more, if possible - of your pretax earnings. If that seems easy, then bump it up to 15%.

Challenge yourself to save more. If, for example, you have $5000 in savings at your local CU but you can earn a higher interest rate if you can bring that up to $10,000, then do it. Then push yourself to bring the total up to $15,000.

Use dollar cost averaging to build up positions in well-run no-load equity & fixed-income mutual funds.

Educate yourself about the investment world, which is much more complex - but also more interesting - than the credit world.

Save more money. Make it a point to end each month with more money in the bank than you had a month earlier. Think you need a new car? Well, you need money in the bank more. You can get another year (or three) out of the car that you have now.

Nothing reduces financial stress like money - the more, the better - in the bank. And there are few things in life more gratifying than telling your bank manager that you're sorry, but you'll have to move some money to another bank because you're about to hit the FDIC limit. And, yes, you can get there.

It's important to get a firm grip on the credit & borrowing side of your financial life, but your savings & investment habits will determine how well you'll be living 5 or 10 years from now.

[Anonymous]

+1 JimB.  Nice!

[MattH]

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@DI wrote:

If you are credit card stress free, besides paying in full monthly, what do you do to stay that way?

Since 2004, I have been stress free from credit cards.  The things I do to stay that way:

1.  Receive all online statements

2.  Check accounts daily

3.  Pay in full

4.  Check my checking account before making credit card payments

5. Don't rely on the deliverance of statements 

6. Set due date around the same time for all cards.

7.  Budget

8.  Don't charge what I cannot afford to PIF within a month

Message Edited by DI on 01-10-2010 07:05 PM

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All sound advice, and pretty close to what I do, particularly point number five above.  Many people seem to think failure to get a statement on time somehow constitutes an excuse for not paying, which ain't so!  People, you should know when each bill typically appears and if it doesn't appear when it should it is your responsibility to check.  A couple more tricks I use:

1. If I happen not to owe anything to one of my regular creditors this month, I go to my bank's online bill pay and make a $5.00 payment.  This will get credited towards the next month's bill.  Why do I make small payments when I owe zero?  So that I can easily check whether I am current on everything by merely scanning my online bill pay history.  If I see it's been more than 30 days since I paid somebody, then I know I had better take action soon.

2. Occasionally after a major purchase for cash flow reasons I want to pay the full balance close to the due date (I could always pull the money out of savings to pay in full right away but would rather not do that).  In such cases, I pay the minimum right away so that if my larger payment happens to arrive just after the due date I won't risk a late fee, only a finance charge.

3. Since online bill pay does not generate canceled checks to confirm that payment was received, it is important to close the loop and verify that payment was properly credited to each account.

[Anonymous]

Good advice.

My largest asset I have with helping my credit score is the use of my account program (AceMoney.  Simple.).  Since I keep track of all transactions and can easily view reports of my spending, I can cut back in certain categories and help set money aside to save.  I have a listing of all accounts and as associated due date.  Usually weekly I'll cycle through all of my accounts and reconsile transactions as well as confirm due dates and payments. 

Keeping up-to-date for the past 2.5 years, I've been able to crawl out of debt where now I'm using a single credit card to merely earn rewards each month.

[Anonymous]

The way I do it is I set up recurring appointments on my gmail calendar, which gives me reminders on my phone.  I set them up for a couple days before my statement cuts for each bill so they statement shows $0 due.  For my credit cards, I go back in after the statement cuts to make sure a charge didn't clear after the payment processed.  I try not to use the cards for a few days prior, but since I use different cards to maximize my rewards, sometimes it's unavoidable. 

Since I got out of debt a few years ago and have started PIF, I've found that this is the best system for me...but I've also found that everyone has a system that's right for them. 

[fishbjc]

The best thing for me is to keep it at a couple of cards.  Getting there, getting there.  I really don't stress too much, not worth the stomach pain..something I've learned.  DH is paid once a month, I don't care how early it is, I get it paid (if I can) he's on commission, so sometimes I need to throw in my pay check.

Amazing what we get ourselves into...grrrrrrrrrrrrrrrrrrrrrrr

[haulingthescoreup]

Like others who've posted here, I just use CC's for convenience.

I think of them as super-slow debit cards. I don't charge anything unless I have money in the bank to cover it, or it will be there by the time I need to pay.

It's nice not to sweat rate-jacks and whatnot.