Duh. My dad’s a bankrupcy agent, and a huge stack of unpaid credit cards is super common for him to see. Have 1 or 2 cards at most, pay them off all the time.
Keep your receipts, and compare them against your bill when you get it. This keeps you from being charged more for something than you should have, being double-charged, etc. (It does happen).
Depending on where you are, by law you are probably only responsible for a small amount if your card is stolen and loads of charges racked up. Don’t pay $$$ for a “protection plan” against this, 'cause you likely already get it for free.
If you travel, or would like to travel, consider getting a credit card from an airline that accumulates air miles. You’d be surprised how quickly you can earn a free round-trip. There are often ways to leverage the miles earned. I frequently get 5-10 miles per $1 when dining out, and 2-4 miles per $1 for some online shopping. Safeway gives me miles for grocery shopping.
When I travel, I get miles for car rentals, hotel nights, and, of course, flying. I agree with the above posts about paying the balance off, and prudent use of the card. But if you’re going to spend the money anyway, and you’re disciplined enough, it might be worth it to use the card for everything.
Did anyone mention paying off your balance every month?
As long as you remember that your card doesn’t give you any more money, you’ll be fine. Your idea of using it for gas is a good one, since you can’t really overpurchase gas, and buying gas with a card is much easier and faster than seeing the dude in the store. You can use it for groceries also, as long as you don’t go overboard.
Rip up the checks they send you as soon as you get them. They’re about the worst loan you can get except from one from someone named Vito. They’ll raise your limit soon enough. Once they do, go for a cashback no fee card. I have Discover and one from MBNA. Mileage cards always have fees, and you’ll have to decide whether being forced to take the trip or lose the benefit is better than cash. I like the cash myself. With Discover you can apply it to your bill or get a check. We get money back and miles from Safeway - can’t beat that.
Thanks for the advice, everyone. I’m taking notes (seriously) and appreciate the input.
I’ve also learned one thing. Even though I’m pretty miserly and don’t think I’ll have much problems controlling my impulses, it’s still pretty risky to peruse Amazon.com with a credit card lying only five yards away.
Damn it. Sorry for the double post here but I meant to ask if someone would go more in-depth on air miles. Living on the other side of a continent from my family, it’s something that I’m interested in.
And cash back too, please. Free money interests me even more.
You didn’t give your age, but here’s something that bites lots of youngish adults with their first card:
DO NOT take the card out with you if you are going drinking with friends. I have known many many people who have racked up $100+ bar tabs after they get a bit buzzed and start doing stupid things like buying rounds and/or opening up a tab. Buy booze with cash only.
Do that a few times, and suddenly you’re carrying a balance… carry your balance a time or two and suddenly you’re $1000 in the hole.
I only use mine for online purchases - that was it’s intended function when I bought it, and it’s still all I use it for, except for things that are over the limit of my ATM card (I think that’s set at $800 in a day). So I paid for my Lasik with it, for example.
But what I do is keep it in the black - I deposit $100 a fortnight into it, whether I use it or not, then when I do go to use it I have an excess to play with. It’s great!. I don’t get a credit rating using that method, I don’t think, but that’s never really been an issue for me.
I don’t have an air miles card, but I understand that you get x miles for every y dollars you spend on it. It’s limited to one program, and I believe subject to all the limitations of booking free flights with points. I believe there is always an annual fee for these.
The cashback cards start with a small percentage of cashback for purchases, and go up to about 1% as you spend more during the year. Discover used to send you a check at the end of the year, but now you can redeem your money more frequently, with a variety of options. You don’t have to do anything special to use it, and there are no limitations about how to use it. My cashback Visa works the same way.
You do sometimes get special offers with more cashback. Discover just had one for grocery stores. A few years back they offered like 10% back on bn.com - you know where I bought my books for Christmas presents that year!
I’ve never checked, not having a balance, but I’d suspect that the interest rates on these cards might be higher than for others. But you already know never to pay interest, right?
I’ve used Discover for well over a decade, and have never had a problem. It’s good to have a Visa or Mastercard for those few places that don’t take Discover, though. That’s the main reason I got the other cashback card.
I recommend the Alaska Airlines credit card. You earn 1 mile for each $1, and can leverage your spending on restaurants and online shopping for extra miles. There are several types of cards to choose from, with different features and fees.
The thing about Alaska Air miles are that they never expire. Most other airline miles are only good for 2 years or so. 20,000 miles gets a round-trip ticket to 175 cities in the US. Pretty good deal, particularly since you can earn 10 of those miles for every dollar spent at Denny’s (for example).
As I mentioned, I have a Citibank Dividends card. It’s a Mastercard, it pays 1% back on all purchases (they automatically mail you a check once your dividend totals $100), and now it looks as if they’ll be giving 5% back for groceries, gas, and drugstore purchases, unless there was some fine print I missed.
Another question: is my credit affected by how often I use the card and for how much? For instance, if I use it five times in one month for $500 total and pay it off the next month, will I get a higher credit ranking than if I used it once for $50? What about the inverse? Once for $500 and five times for $50?
