Our Rules For Credit Card Use

Credit CardsI haven’t written too many articles about credit cards. Mostly it’s because we only have one credit card and don’t use it all that often. When we do use our card we pay the balance off right away. That’s just what we’ve always done and what we’re comfortable with. We hate debt with a passion and have worked very hard to never be in a position to use our credit card for a purchase which we couldn’t cover with cash on hand. Because we only have one credit card, we haven’t needed to shop around to compare credit cards, look at best APRs, zero balance transfers and the like. Our credit card is through our local credit union, has no annual fee, offers no rewards, and has a low interest rate. It works for us.

While we don’t use our credit card often, we do use it occasionally and have a few financial rules we follow for its use:

Only Use The Card For Purchases We Intend To Pay Off Immediately
Basically if we don’t have the cash on hand to pay for an item, we don’t purchase it. I’ve found the credit card comes in handy to use for making online purchases because I don’t feel safe in using my debit card for online transactions. We have used it to purchase a few of our appliances when they’ve needed to be replaced but we had the cash in our emergency fund to pay for the bill when it arrived. It was just more convenient to use the card to make the purchase.

Keep A Running Total of What’s Been Spent
We save every receipt from purchases we make on our credit card and keep the receipt in a special folder. This makes it easy to verify the purchase and also serves as a record of when we made the purchase if a warranty is involved. In addition, it keeps us accountable because we know how much we’ve spent, even if the money hasn’t left our pockets just yet.

Review the Credit Card Statement Before Paying It
While we haven’t found any major errors on our credit card statement, we’ve made it a point to always review the bill thoroughly before we’ve paid it. We make sure the amounts match the receipts that we’ve saved and that no unauthorized or surprise charges have hit the bill.

Verify the Auto Pay Bills
We only have two bills that are set for automatic payment. We check to make sure these amounts are correct, as we don’t want to get into the habit of ignoring these bills while they could potentially increase each month.

Shred the Statements
Once we’ve verified the charges and paid the bill, we either save the receipt in the appropriate folder or we shred it with a cross cut shredder. We use a shredder for all our financial documents when they are no longer needed.

Reader Questions:
Do you have any rules for your credit card use?

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15 comments

  1. krantcents says:

    I really do not have rules specifically for our credit card. We normally do not spend more than we earn. I guess that is a rule!

  2. Robert @ The College Investor says:

    I consider my card like a debit card and pay it off in full each month. No balance, ever.

  3. Charles says:

    since my wife and I have a total of 15 credit cards between us, it’s hard to keep track of our expenses. So i created a google spreadsheet that we share and i update the total balance on each of the card every week so she and I both know how much we have left in our credit card budget for that month.

  4. Catwoman says:

    I only have got one rule for credit cards: if I don’t have the money for something, then I won’t buy it. It’s simple and I cannot get in trouble. Nice post btw

  5. Jen @ Master the Art of Saving says:

    I pretty much do all of the above mentioned, nothing else comes to mind. :-)

  6. Jackie says:

    I use two credit cards all of the time: one for business and one for personal. My rules are that I don’t buy things that I don’t already have the money for, and that I pay them off in full each month before they are due. (I have autopay set up as well.) I had a bad experience with a debit card, so try to avoid using that.

  7. Little House says:

    I just switched to using my credit cards for everyday purchases for points. So far, it’s been a good switch. I make payments weekly on the cards so that I don’t accrue interest charges. I also make sure to use less than 33% of the total available credit at any one time. Since I bank on line, it’s easy for me to track my expenses. And my credit card organizes the charges by category which is a nice feature.

  8. SB @ One Cent At A Time says:

    Immediately go paperless. This is least you can do to save environment. If you can read this blog on internet, you can very well check your online statements. That wash the first suggestion I had. The next one is selecting a reward card and using in such a way to maximize benefits.

  9. Taline says:

    I have an AMEX rewards CC that earns me over $1K in rewards annually. I pay it off monthly and use it only for the rewards part of it. Anyone heard of Perkstreet Financial. I just opened an account with them. They claim to do cash back rewards on debit non pin purchases….what a concept! I will see if they really do!

  10. Tyler S. says:

    Sounds like just about everyone agrees: Don’t make any credit card purchases without having the funds to pay the balance off in full every month – simple enough! This is my strategy as well, as I’ve only just started using credit cards for daily purchases. I had always just used my debit card for everything, until my friend suggested I try to get a nice rewards credit card to get something back from what I’m spending. So far it’s easy enough, and I’m interested to see how long it will take me to build up significant rewards!

  11. CultOfMoney says:

    Saving each and and every receipt seems like an awful lot of work. Especially if you have an online statement that you can look at and get the same running (or MTD) total. Of course I use only one credit card at a time, and which one depends on if I’m trying to get to a spending threshold.

  12. Jeff Crews says:

    I am with most of the people here…..I do not use my credit card unless I know I can pay it off right away. I recently got a second credit card for 1. the rewards and 2. the sign up bonus. I feel like I have pretty good control of my finances so I might as well make some money off of rewards, etc.

  13. Shelly says:

    You are missing out on some great rewards by not using a credit card. We have 3 credit credit cards. We use our AmEx card the most because it gets us the biggest rewards. Last year we received 2 free flights and we’re heading to Mexico in just a few weeks for very cheap. Second, we have a Discover card. This card earns cash back or rewards – not a whole lot but we did get back a couple hundred dollars last year. Thirdly we have a VISA for places that don’t accept AmEx or Discover. We don’t pay any fees on any of these cards and always pay them off each month. We use a credit card to pay everything including our phone, utilities, etc.

  14. Melissa@PersonalFinanceJourney says:

    We have stopped using our credit cards completely, and I don’t find that I miss them very much. Online purchases are a bit tricky, but we use PayPal when we can.

  15. Money Beagle says:

    The main reason we use credit cards is to accumulate cash back rewards. Since we pay the cards off every month and all of our cards have no annual fees, the $300-400 per year we get makes our spending very well worth it.

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