Paying Only With CC

[Anonymous]

Please explain to me how you pay with credit cards only. Do you not touch your checks/income until it is time to pay your credit card bills? I read this and am super confused as to how people manage this.

[Anonymous]

That's how I'm doing it. My paycheck remains in my bank account untouched. I pay all bills, entertainment, and whatever else I can afford that month on my credit cards. I keep track of what I spend to be sure what is in my bank account will cover it. Then I pay the balance of my credit cards in full by or before the due date using the money in my checking account. I hope this makes sense.

[takeshi74]

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@Anonymous wrote:

Please explain to me how you pay with credit cards only. Do you not touch your checks/income until it is time to pay your credit card bills? I read this and am super confused as to how people manage this.

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It's pretty straightforward.  Everything that can be paid with cards is paid with cards.  Not everything can be so some things are paid without cards.  Then the cards are paid off.  However, you have to ensure that you don't spend what you don't have.

What's causing your confusion?

[Anonymous]

i use a third party calendar app and track my purchases using that. so, today for instance, i used my credit card for lunch. i write which card i use and how much i spent, then transfer that amount from my checking to my savings to the penny. each friday i pay off my credit card to the cent because i transfer perfectly. i use my debit card for absolutely nothing anymore. that way you can see real-time how much you would technically have in your account so once you transfer all of it to savings, you're out of money. simple.

then of course keep a separate savings for your "actual" savings lol.

[shimabuku]

Is this the preferred method to improve ones credit score?

[Callandra]

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@shimabuku wrote:

Is this the preferred method to improve ones credit score?

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Can't speak for everyone, but I think most people do it to maximize rewards.

It's easy for me:

1. I have a budget based on my income. 

2. The things that I cannot use a CC for (rent, health insurance, car payment) are paid for via EFT and are accounted for in my budget.

3. The rest leftover after those bills is purchased with a CC (I allow myself XXX amount of dollars every month to charge. Except for emergencies, I never go over)

4. CC bills are paid soon after statement cuts.

It works for me!

[adavis425]

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@Anonymous wrote:

Please explain to me how you pay with credit cards only. Do you not touch your checks/income until it is time to pay your credit card bills? I read this and am super confused as to how people manage this.

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Exactly!

[DaveInAZ]

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@shimabuku wrote:

Is this the preferred method to improve ones credit score?

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I would say "strenghten" one's score, by showing as heavy usage as possible. For example, if you have insurance, utilties, etc. come out of your bank account and only charge a small amount to your CCs - dining out, groceries, gas - no one knows about what comes out of your bank account and creditors think you only have a small income because what is charged to a CC is the only thing that shows up on a CR. Another benefit is rewards, my cards give 2% cashback on certain categories, and my Cap One QS gives me 1.5% on everything. The other thing I like is the free $$$ "float" - I just got an email my insurance premium for 2 cars & 1 house was charged to my Cap One QS today. If it had been deducted from my bank account the money would be gone today, but now I have until the end of June to pay Cap One in full with no intgerest expense. Instead, I get $5 cash back in rewards.

[Anonymous]

I will be honest in that I only use credit cards for the rewards.  I do not spend what I do not have - I use the "grace period" (and the need to carry a balance) for emergency use only.  I use my credit cards to pay for anything/everything where it is not monetarily detrimental such as paying rent (additional surcharge fee) and at Mom-and-Pop shops where the swipe fee can really hurt.

I manage my credit spend by maintaining a budget Excel spreadsheet.  I review it and my online accounts on a daily basis just to be sure things are in order and there aren't any funny business going on.

[takeshi74]

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@shimabuku wrote:

Is this the preferred method to improve ones credit score?

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Despite how often usage is cited as having a causal relationship with scores here it doesn't necessarily improve or harm scores on its own.  Keep the standard factors in mind:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

It's really a matter of maximizing rewards.