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?