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Rules of Credit Cards

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Rules of Credit Cards

I grew up in a very modest home where credit was very much a feared concept. My parents spoke about credit cards very poorly and something to stay away from. Neither of them ever had credit card debt, and looked at credit scores as a finance scheme to keep people in debt.

Now as a 30 year old adult, I look back thankfully as having that instilled caution so early. I think my parents were a bit too extreme in their frugal finance practices, but I respect it. I decided to get my first credit card at 20 years old, and from day 1 set 3 rules to never break under any circumstance (minus life threatening which i thankfully have not encountered). Stricktly abiding by these 3 rules has helped me to maintain a healthy 800+ score, always be positive with my spend/reward ratio, and get me any card I have wanted thus far.

1.) Never pay interest, not a dime.
2.) Never spend more than you have in liquid funds, even during a 0% APR period.
3.) Never buy anything you would not buy anyway just to meet a sign-on bonus spend.

I just added #4 a few months ago...

4.) Deposit all cashback rewards to a savings account to earn interest on cashback rewards. Spend on something you want after 5 years.

There have been times I was tempted, but I have never broken these rules in 10 years. I paid $10 on cash withdrawl when I was out of the country (it still bothers me when I think about it, and I know thats weird)

Does anyone else have any groundrules that you refuse to break?
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Message 1 of 5
4 REPLIES
Valued Contributor

Re: Rules of Credit Cards


@Makersmark23 wrote:
I grew up in a very modest home where credit was very much a feared concept. My parents spoke about credit cards very poorly and something to stay away from. Neither of them ever had credit card debt, and looked at credit scores as a finance scheme to keep people in debt.

Now as a 30 year old adult, I look back thankfully as having that instilled caution so early. I think my parents were a bit too extreme in their frugal finance practices, but I respect it. I decided to get my first credit card at 20 years old, and from day 1 set 3 rules to never break under any circumstance (minus life threatening which i thankfully have not encountered). Stricktly abiding by these 3 rules has helped me to maintain a healthy 800+ score, always be positive with my spend/reward ratio, and get me any card I have wanted thus far.

1.) Never pay interest, not a dime.
2.) Never spend more than you have in liquid funds, even during a 0% APR period.
3.) Never buy anything you would not buy anyway just to meet a sign-on bonus spend.

I just added #4 a few months ago...

4.) Deposit all cashback rewards to a savings account to earn interest on cashback rewards. Spend on something you want after 5 years.

There have been times I was tempted, but I have never broken these rules in 10 years. I paid $10 on cash withdrawl when I was out of the country (it still bothers me when I think about it, and I know thats weird)

Does anyone else have any groundrules that you refuse to break?

All those you listed except 4....also added a few you don't list, and editet #3

 

1.) Never pay interest, not a dime.
2.) Never spend more than you have in liquid funds, even during a 0% APR period.
3.) Never buy anything you would not buy anyway if I did not have credit cards.

4.) Never pay with a credit card if there is a surcharge for doing so, where it is cheaper with other pay method.

5.) Never apply for a card that has such a high spend for the SUB that I can not easily meet it with normal spend.

6.) Never pay an AF unless the benefits will easily pay it, or it is for a service I was already paying for(Prime)

7.) Always use rewards cards, and use them even for that which I have cash in pocket to pay, if there is no savings using cash.

8.) Pay in full every single card I use before statement cut date, except the 0% interest card that I transferred an installment loan too.

 

These rules I adhere to strictly...with 1 exception...My sister owed on some high interest cards and IRS debt. I made her an AU on my low interest (4.99%) credit card at the credit union we both belong to. She used this card to pay those. All charges on that card are hers, and she makes all the payments. That card carries a balance, and has interest which she pays. Since it is in my name, it might technicaly break rule 1, but if it makes sense, for Family I will break rules!!!





TU fico08=810 08/29/18
EX fico08=796 09/05/18
EQ fico08=811 09/05/18
EX fico09=797 08/01/18
EQ fico bankcard08=827 08/28/18
Garden since 07/02/18
Message 2 of 5
Frequent Contributor

Re: Rules of Credit Cards

Wow...we could be twins, except I'm atleast 6 years younger. I too have an identical backstory but with a $0.41 FTF that haunts me. Darn you default card in Apple Pay. 



Message 3 of 5
Established Contributor

Re: Rules of Credit Cards

We share the same practices and beliefs.

Life was a lot simpler when what we honored was father and mother, rather than all major credit cards. ~Robert Orben

SCORES: Excellent · 830 to 848
INQUIRIES: 0
UNIVERSAL REVOLVERS: $200K Club
NUMBER OF CC ACCOUNTS: Less than 10
CARD USAGE: Minimal
CREDIT HISTORY: Very Lengthy · Seasoned Accounts
INCOME: Sufficient
UTIL: 1-2%
PYMTS: 100% Positive · Always PIF · AZEO
INSTALLMENTS: No thanks!
ASSETS: 100% Equity
TOTALLY REFUSE TO: Pay Interest or Annual Fees, Combine Accounts, Reduce Limits, Submit 4506-T, SCT, App Spree, Accumulate Inquiries, Do business with Comenity, Synchrony, Cap One, Wells Fargo, Citi, Barclays or any other credit-cancerous lending institutions
Message 4 of 5
Valued Contributor

Re: Rules of Credit Cards


@sarge12 wrote:

 

1.) Never pay interest, not a dime.

 

4.) Never pay with a credit card if there is a surcharge for doing so, where it is cheaper with other pay method.

1. Often the best practice, but this assumes you can't out-earn the APR on an after-tax basis.

 

4. This assumes you can't out-earn the surcharge.

Protections: CSR, Schwab Platinum, Costco, Double Cash
Rewards/Offers: BBP, CF, CFU, Discover, ED, BCE
Annual nights: IHG, Hyatt
PIN: Arrival
Bonus chasing/retention games: Aviator Red, SPG Luxury
Message 5 of 5