Using Credit Cards Wisely

I’ve had my credit card for almost 6 months now, and it’s a great feeling to know that I’ve used it wisely enough to not have to pay a dime in interest so far. The only way to do this is to pay the balance off every month. And so I have. But here comes my admission:

It’s not only wise to pay off your credit card every month but it’s wise to not put more on there then you can realistically handle for that month without having to cut other things in your budget.

The reason I bring this up is because though I’ve paid off my card every month I’ve had to forgo a few of my payments to myself (aka: savings) in order to make sure I didn’t receive any finance charges. Of course, it was worth it to me since I already had some saved up to go ahead and pay off the card but at the same time I wish I wouldn’t have put so much on there. Was it too much to handle? No. But then again, it was! Because I wasn’t able to do the thing I want to do the most for a few weeks: pay myself!

But as of today I’m back in the game. My credit card balance is back to 0, still no finance charges, and I am ready to pay myself first when my next paycheck comes in. It will be a nice feeling to see my emergency fund start to build.

Obviously, my position is GREAT compared to some but I try not to compare myself to others. I compare myself to well, myself and the goals and position I’d like to be in. And for a little bit there I was falling short of that.

So here’s to using credit cards wisely:

1. Pay off the balance in full every month. I know, it’s said over and over and I’ll say it again. If you don’t have the money–don’t buy it!

2. Put a plan in place. If you don’t have a plan in place, you need to get one! Decide on what you are going to use your credit card for. Is it for gas? Is it for all your expenses? Is it just for special times like vacations or other trips? Whatever it is, keep it simple and stick with it.

3. Watch little expenses. Depending upon your plan, it’s still easy to put things on your credit card without thinking twice. I realized 2 months ago that the majority of my balance (which wasn’t much but still…) was food. Food?? Why didn’t I just pay that with my debit card or cash? I don’t know the answer to that but I wish I wouldn’t have. It’s just unnecessary stuff and definitely out of my “plan.” =)

4 Responses

  1. You should cut up that credit card and go the Dave Ramsey way! Seriously.. There is NO point to having them. PLUS we all know life is full of hard times, there is always going to be a rainy day… Will you turn to your credit card or will you have some savings?

    PLEASE read Dave Ramsey’s stuff and heed wisdom! There is a better way. Credit Card’s do not help anyone!

    • Matt, Thanks for the comment. I had read almost all of Dave Ramseys stuff and definitely agree with him on major principles of financial management. He is actually the one who got me interested in all of it!

      At the same ring there is a big difference between people who understand how to use credit in general and people who don’t. I applied for a credit card at my local credit union with a $1000 limit in order to build credit by paying it off every month. It has been great for that use so far! And thankfully I have a rainy day day fund set up that exceeds even my card limit. =)

      But yes, I do agree that cutting up the cards is best for those who find they can’t pay it off every month easily.

  2. But financial management doesn’t need credit cards.. Credit cards I honestly believe is not apart of financial management. Its ONE OF the biggest ingredients in the mix that can cause financial ruin. Whether we think we can “manage” them or not.. I had one for over two years and NEVER paid an penny in interest.. BUT life does happen.. and if your car breaks down, house catches on fire.. what will you turn to? I don’t even want the option to go into debt if something happens.. I would rather be financial WISE and plan ahead.. knowing rainy days will happen.

    If you read all of Dave Ramsey’s stuff, he highlights why you don’t need a credit card or to build credit. So if you take the whole “building credit” out of the scenary.. there really is no point in having one..

    I am not trying to start a debate with you or anything.. I just think too many people are buying into the “american way” that says we have to have these little pieces of plastic.. “Just in case” or “to build credit”.. I cut mine up over a year ago and it has been GREAT living free of those pieces of plastic! 🙂

    Look into it more! There is more truth out there for those willing to hear it 🙂

    God bless!

  3. cable companies are also offering broadband internet these days and the cost is cheap too .-;

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