How to use Credit Cards in everyday life

[Anonymous]

Althought I've dealt with CCs since 1977, I'm new to the game at this level.  Until just a few weeks I kept 2 cards in my wallet, an American Express Gold, and a VIsa issued by the bank I've done business with almost 40 years. (large regional bank).  The lady handling my mortgage pre approved my loan but advised my lack of revolving credit activity, was hurting my score.  The 2 cards I have I seldom used, because I was taught it was not good to owe money.

Following the advice, I shopped around and picked up the Chase Freedom, and Citi Double, bring my total to 4 cards with a combine CR limit of 25k.  My scores jumped ave of 25 pts, and over 30 on Experian.  So the advice given by the cousenlor was solid, and the wisdom here also helped- ALOT.

With this line up of 4 cards on the field, how do I need to play it?  Or do I need to delve back into "free agency" and pick up a couple more players?  Apparently, most here use their cards for everyday stuff.  My soon to be new mortgage payment on the new house is gonna come in somewhere in the 1300-1500 a month range (depending how much I decide to pay down).  I'm thinking thats ALOT of rewards each month, so is it a good idea to use a card for it?  Or just keep it on bank draft?   Could I use one card for all the monthly house stuff? (mortgage, lights, gas, cable)  Another for groceries, gasoline, and yet another for dining out, travel, movies, (empty nest so we tend to do that alot)

I went back and looked through my bank statements (I use online banking) and consistently see about 6,000 a monthly coming through it.  I'm looking at this and saying, "Ok 6 a month is coming through my checking account, how much of that would be good to go out in CC payments?  Or is that the wrong approach? Heck I dunno, like I said, I'm new at this.  

I don't have a formal finance advisor (guess I need to get one) but things have never been complicated for me in the past.  After 7 years of no mortage payments, and before that  payment was 378, so my LO said my life was about to change. LOL  She is rightfully concerned I might be what y'all call "sticker shocked."  My wife also works and makes a pretty good living, but thats another thread.  Let me see the path first and I can in turn help her.  I know I'm going to have to pay attention to the money with a 1500 dollar a month mortgage.  In the past I didn't even look at a statement till the end of the month, and then it was just token.  My parents would be aghast, at a 1500 a month mortgage, and frankly, I am a little intimidated.  They lived through the Great Depression, and in turn passed that mentality on to me.

Any advice on this would be helpful.

[Themanwhocan]

This explains the how to use your cards to build a good credit score:

http://ficoforums.myfico.com/t5/Credit-Cards/How-do-I-play-the-1-9-Utilization-Game-Please-Help/m-p/...

[navajomyst2003]

If you don't travel a whole lot and will PIF every month, I would suggest a solid cash back card and make the CC work for you. sallie Mae, discover, citi DC and Fidelity Amex come to mind.

[Themanwhocan]

It is doubtful that you will be able to use a credit card to pay your morgage. if they accepted a credit card for payment, they would have to pay the credit companies more than you would be gaining in cash back, which is very significant for morgages. Which is why it won't work...

You can of course use it to pay normal expenses and get cash back for those. the Double Cash is a good default card for those expenses, and we can certainly help if you want better cards for certain categoies of expenses, like 5% cash back on Groceries and Gas, etc.

[Anonymous]

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@Anonymous wrote:

Althought I've dealt with CCs since 1977, I'm new to the game at this level.  Until just a few weeks I kept 2 cards in my wallet, an American Express Gold, and a VIsa issued by the bank I've done business with almost 40 years. (large regional bank).  The lady handling my mortgage pre approved my loan but advised my lack of revolving credit activity, was hurting my score.  The 2 cards I have I seldom used, because I was taught it was not good to owe money.

Following the advice, I shopped around and picked up the Chase Freedom, and Citi Double, bring my total to 4 cards with a combine CR limit of 25k.  My scores jumped ave of 25 pts, and over 30 on Experian.  So the advice given by the cousenlor was solid, and the wisdom here also helped- ALOT.

With this line up of 4 cards on the field, how do I need to play it?  Or do I need to delve back into "free agency" and pick up a couple more players?  Apparently, most here use their cards for everyday stuff.  My soon to be new mortgage payment on the new house is gonna come in somewhere in the 1300-1500 a month range (depending how much I decide to pay down).  I'm thinking thats ALOT of rewards each month, so is it a good idea to use a card for it?  Or just keep it on bank draft?   Could I use one card for all the monthly house stuff? (mortgage, lights, gas, cable)  Another for groceries, gasoline, and yet another for dining out, travel, movies, (empty nest so we tend to do that alot)

I went back and looked through my bank statements (I use online banking) and consistently see about 6,000 a monthly coming through it.  I'm looking at this and saying, "Ok 6 a month is coming through my checking account, how much of that would be good to go out in CC payments?  Or is that the wrong approach? Heck I dunno, like I said, I'm new at this.  

I don't have a formal finance advisor (guess I need to get one) but things have never been complicated for me in the past.  After 7 years of no mortage payments, and before that  payment was 378, so my LO said my life was about to change. LOL  She is rightfully concerned I might be what y'all call "sticker shocked."  My wife also works and makes a pretty good living, but thats another thread.  Let me see the path first and I can in turn help her.  I know I'm going to have to pay attention to the money with a 1500 dollar a month mortgage.  In the past I didn't even look at a statement till the end of the month, and then it was just token.  My parents would be aghast, at a 1500 a month mortgage, and frankly, I am a little intimidated.  They lived through the Great Depression, and in turn passed that mentality on to me.

Any advice on this would be helpful.

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Pay everything possible with a CC as long as it doesn't cost you money.

[SunriseEarth]

You definitely don't have to incur unneccesary debt to use credit.  I think the best method is to use your credit card just as you'd use a debit card or cash and PIF.   If you do that, you can avoid interest.  Just keep the posted balance below 10% of your CL.  

What year did you first join AMEX?  AMEX backdating could definitely help your score.   I'd recommend getting an AMEX revolver in January.  Otherwise, I see no need in getting a lot of CCs if you don't want/need them.  

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Althought I've dealt with CCs since 1977, I'm new to the game at this level.  Until just a few weeks I kept 2 cards in my wallet, an American Express Gold, and a VIsa issued by the bank I've done business with almost 40 years. (large regional bank).  The lady handling my mortgage pre approved my loan but advised my lack of revolving credit activity, was hurting my score.  The 2 cards I have I seldom used, because I was taught it was not good to owe money.

Following the advice, I shopped around and picked up the Chase Freedom, and Citi Double, bring my total to 4 cards with a combine CR limit of 25k.  My scores jumped ave of 25 pts, and over 30 on Experian.  So the advice given by the cousenlor was solid, and the wisdom here also helped- ALOT.

With this line up of 4 cards on the field, how do I need to play it?  Or do I need to delve back into "free agency" and pick up a couple more players?  Apparently, most here use their cards for everyday stuff.  My soon to be new mortgage payment on the new house is gonna come in somewhere in the 1300-1500 a month range (depending how much I decide to pay down).  I'm thinking thats ALOT of rewards each month, so is it a good idea to use a card for it?  Or just keep it on bank draft?   Could I use one card for all the monthly house stuff? (mortgage, lights, gas, cable)  Another for groceries, gasoline, and yet another for dining out, travel, movies, (empty nest so we tend to do that alot)

I went back and looked through my bank statements (I use online banking) and consistently see about 6,000 a monthly coming through it.  I'm looking at this and saying, "Ok 6 a month is coming through my checking account, how much of that would be good to go out in CC payments?  Or is that the wrong approach? Heck I dunno, like I said, I'm new at this.  

I don't have a formal finance advisor (guess I need to get one) but things have never been complicated for me in the past.  After 7 years of no mortage payments, and before that  payment was 378, so my LO said my life was about to change. LOL  She is rightfully concerned I might be what y'all call "sticker shocked."  My wife also works and makes a pretty good living, but thats another thread.  Let me see the path first and I can in turn help her.  I know I'm going to have to pay attention to the money with a 1500 dollar a month mortgage.  In the past I didn't even look at a statement till the end of the month, and then it was just token.  My parents would be aghast, at a 1500 a month mortgage, and frankly, I am a little intimidated.  They lived through the Great Depression, and in turn passed that mentality on to me.

Any advice on this would be helpful.

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Pay everything possible with a CC as long as it doesn't cost you money.

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+1

[mongstradamus]

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@SunriseEarth wrote:

You definitely don't have to incur unneccesary debt to use credit.  I think the best method is to use your credit card just as you'd use a debit card or cash and PIF.   If you do that, you can avoid interest.  Just keep the posted balance below 10% of your CL.  

What year did you first join AMEX?  AMEX backdating could definitely help your score.   I'd recommend getting an AMEX revolver in January.  Otherwise, I see no need in getting a lot of CCs if you don't want/need them.  

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This is very good advice do not use CC to buy something you wouldn't normally buy with cash. I also would use something like mint or CC website to exactly see what you are spending money on

[longtimelurker]

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@Anonymous wrote:

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@Anonymous wrote:

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@Anonymous wrote:

Althought I've dealt with CCs since 1977, I'm new to the game at this level.  Until just a few weeks I kept 2 cards in my wallet, an American Express Gold, and a VIsa issued by the bank I've done business with almost 40 years. (large regional bank).  The lady handling my mortgage pre approved my loan but advised my lack of revolving credit activity, was hurting my score.  The 2 cards I have I seldom used, because I was taught it was not good to owe money.

Following the advice, I shopped around and picked up the Chase Freedom, and Citi Double, bring my total to 4 cards with a combine CR limit of 25k.  My scores jumped ave of 25 pts, and over 30 on Experian.  So the advice given by the cousenlor was solid, and the wisdom here also helped- ALOT.

With this line up of 4 cards on the field, how do I need to play it?  Or do I need to delve back into "free agency" and pick up a couple more players?  Apparently, most here use their cards for everyday stuff.  My soon to be new mortgage payment on the new house is gonna come in somewhere in the 1300-1500 a month range (depending how much I decide to pay down).  I'm thinking thats ALOT of rewards each month, so is it a good idea to use a card for it?  Or just keep it on bank draft?   Could I use one card for all the monthly house stuff? (mortgage, lights, gas, cable)  Another for groceries, gasoline, and yet another for dining out, travel, movies, (empty nest so we tend to do that alot)

I went back and looked through my bank statements (I use online banking) and consistently see about 6,000 a monthly coming through it.  I'm looking at this and saying, "Ok 6 a month is coming through my checking account, how much of that would be good to go out in CC payments?  Or is that the wrong approach? Heck I dunno, like I said, I'm new at this.  

I don't have a formal finance advisor (guess I need to get one) but things have never been complicated for me in the past.  After 7 years of no mortage payments, and before that  payment was 378, so my LO said my life was about to change. LOL  She is rightfully concerned I might be what y'all call "sticker shocked."  My wife also works and makes a pretty good living, but thats another thread.  Let me see the path first and I can in turn help her.  I know I'm going to have to pay attention to the money with a 1500 dollar a month mortgage.  In the past I didn't even look at a statement till the end of the month, and then it was just token.  My parents would be aghast, at a 1500 a month mortgage, and frankly, I am a little intimidated.  They lived through the Great Depression, and in turn passed that mentality on to me.

Any advice on this would be helpful.

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Pay everything possible with a CC as long as it doesn't cost you money.

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+1

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Well, eventually yes, but I wouldn't recommend it now.  The OP has a new mortgage which, with the Great Depression-influenced upbringing is causing some concern.   So I would advocate for now changing as little as possible, and see how the mortgage payments fit into your budget, with most things coming out of the bank account for easy tracking.    Then, when you see how things are going, and where the big non-mortgage spending is (which might well be different from before), then a) see if there are credit cards that give good rewards on that spending, and b) shift more spending in general to cc for rewards.

It's easy to get excited here about rewards, and worrying about the differences between 1.5% and 2%, or if 1 MR > 2% etc, but on "moderate" spend, rewards will bring in, at most,   a few hundred dollars a year.   Not enough to immediatly change your habits for, IMO!

[Imperfectfuture]

I started with a Paypal debit card with cash back (grandfathered in @1,5%, still have it).

After 6 years of managing that (no credit with the card), and 1.5 years with credit union card paid in full, I then learned how to treat cash back cards like debit cards. As soon as card is available, or as part of approval process, I set up online account with bank account ready to pay. When paying online, if necessary, I have my bill paying account open to verify balances, use calculator for payments, etc, just like balancing a check book. I then apply rewards about once a month ( or in the case of BCE, when they are awarded).

When you get used to that, then familiarize yourself with the specials offered online with the card. You can save some money if it's something you were going to buy or need anyway, and it's extra cash back.