No debt at all. Pay off our credit cards every month. Paid off my mortgage a decade ago.
About 5% now, zero by February and until say September and then a slow creep towards 5% again. Been that way for ages and I can live with that.
At one point I had an enormous amount of credit card debit.
Something like $50,000.
This was the result of a lot of expenses combined with a huge cut in income. It took 5 years or so, but I paid it all off, and even managed to pay off my 15 year mortgage around 7 years early. Now I have no consumer debt of any kind.
I still charge everything, and pay it off each month.
I use cards only for travel expenses and pay them off when I get the bill.
I have 3 credit cards: Discover, Macy’s and Kohls. There’s a zero balance on the department store cards. I don’t make purchases that I can’t pay back within 1-2 months. On the Discover card I have a $128 balance which will be paid off before the end of the year. At the beginning of 2014 I owed about $1000 on it. I paid as much as possible every single month and tried not to use it for anything. I’m happy that I’m almost done with it.
I have huge credit limits on all of the cards. Sometimes I just want to be totally irresponsible and go on a shopping spree that I can’t afford. There are women at my work who have umpteen outfits and many many shoes and boots. I kind of envy that. I dress nice but within my budget. I don’t have a closet-full with a huge variety of clothes. I look for clothes at resale shops and thrift stores and sometimes go to the mall to get something new, but I pay it off right away, or pay cash. The other day I resisted the urge to buy a bottle of Coco Mademoiselle, by Chanel, one of the few perfumes that I really like. It was $90 for 3.5oz bottle. Sure, I could put it on my Macy’s card and worry about it later, but I don’t like that kind of thinking. It can get me in trouble.
I like having a credit card where you get miles for shopping. We used it recently to pay for our hotel on a trip.
If you use an airline credit card and you fly alot you can get some free trips out of it.
As far as I know, use of a debit card is more dangerous as there is no recourse, no way of disputing a charge. I have a couple of Visa or MC branded debit cards but I avoid using them. I put about $4K a month on my main credit card and get a 1.25% rebate and pay it off every month. This much more than makes up for the $80 annual charge.
But I wonder. If the merchants (who are obviously paying that 1.25%) would give me a 2 or 3% discount for cash, I would give them the cash. Of course, there is no recourse for cash either, but that discount would make up for it.
So nearly 4 of 5 dopers carry no balance. Or nearly 4 out of 5 who chose to respond.
Unless the rules have changed while I wasn’t looking, this is not wise. The difference between you and me is that since you have a debit balance you pay interest on your purchases from the day you buy them, while I pay nothing on my purchases ever. If I had a $1 debit balance and charged $4K over the month, I would be paying something like $40 a month interest on my new purchases (I can only guess because I have no idea what my interest rate is). So that 1 - 3 days income of CC balance is costing you a lot (unless you charge very little). It is well worth paying it off.
Mine’s in the 25-50% range, which sounds horrible, but it was for a dental issue. It’ll get paid off by February.
Alot? Is that the Israeli national airline?
(My bolding.)* Ding ding ding ding ding*… we have a winner.
I have one debit card. When I see people pull out a wallet full of cards while I’m cashiering, I always wonder WHY?
Well, the duh answer is because they got the offers, took them, and think it’s some good thing to have 1-5X their annual income in card credit. (May as well have a wallet full of razor blades, IMHO.)
I have four cards - debit, airline miles Visa for regular spending (paid off each month), high-limit Visa for major purchases, and a business Visa mostly used for online purchases and vendor payment. About the only reason we have two general cards is wariness of having one credit provider - we’ve been caught in a noose of provider changes or problems (theirs - not ours) more than once, so having a backup has paid off from time to time. The miles card is also relatively high rate - 9 something - while the major card is much lower and makes it cheaper to spread out purchases over a couple of months when necessary. I’d rather pay a few bucks in interest to pay things from income than move money in and out of deeper resources.
Business Amex that gives 3% cash back
Business Mastercard for stores that don’t take Amex
Business Amex for a Client company for which I occasionally make purchases
Personal Amex that gives 3% cash back but only at gas stations and grocery stores
Personal Mastercard that gives up to 5% cash back but only at certain restaurants
I know it sounds like a hassle to keep track of various cash back programs, but I just think of it as my restaurant card, my grocery store card, my office supply store card, my computer equipment card, etc… It’s worth the hassle to get a few thousand back at the end of the year.
I should add that our cards were chosen for lowest cost - no annual fees, lowest tier of interest rates, minimum of gotcha fees and charges - and stability. The miles from the spending card are nice but nothing I value much; I’d switch if the card costs went up in any way.
Most reward and rebate cards are a hassle to manage and maintain - annual fees, having to watch where you use them, often high(er) interest rates, limited acceptance, and forever having to monitor, switch, keep track and juggle them. If you’re of a mind to do that juggling and management, power to yez… it’s like perpetually having cable or internet at introductory rates by jumping providers every 6-12 months.
I’ll take low fixed costs, reliability and zero management effort over “rewards.” I’d wager I come out ahead of even users of generously-rebated cards after you factor in extra costs from management mistakes (high late fees and interest when purchases aren’t paid off a month or two) and price management time at minimum wage. 