Before you all judge me as a rich bitch with loads of money to pay off my credit card balances every month, you must first hear my credit history.
I am the guy who was so scared of bankruptcy, my parents had to bail me out in my 20’s. I am the guy who had an $11,000 graduate student loan that took over 15 years to pay off. And I am the idiot who saw a rising stock market as an opportunity to borrow on his credit cards to make millions upon millions of dollars. That was the week I found I had the power to cause a market crash. That debt took a few years to pay off!
Incredibly enough, I actually learned from my mistakes. It took almost 20 years, but it actually happened. My spouse went to law school and saddled us with $150,000 in debt. I made sure that loan was paid off faster than my $11,000 loan. I had a full time income at the time so I also made him put the maximum in his 401K. Why do you think I finally married him three years ago!
We have finally reached financial stability, and it did not happen until I turned 50. So, for those who judge me as having a richer life than theirs, I earned every penny and learned a lot from making many, many mistakes.
Re credit cards, I was always greedy for airline miles so I started thinking in terms of only signing up for cards that benefitted me. I put everything on the credit cards, my phone payments, my cable TV bill, garage payment, every possible thing. I try never to pay by check. And since we are finally financial solvent, I do not pay any interest as I pay off all balances monthly. OMG, I hope I did not jinx that!
You will see below some credit cards require a several thousand dollar purchase to earn their maximum signing bonus. I try to always get a great new credit card deal just before a big bill. My son’s sleep away camp is an example of a big bill. Re the first item below, my spouse and I both opened accounts, and we both got the bonuses.
Lastly, almost all of my deals are membership fee free for the first year. You know I cancel after that period! I do not overdo this enough to hurt my credit rating, but I try to do a couple a year.
1. Chase Sapphire. For the second time in a few years I signed us up. We received 40,000 miles after spending about $3000 over 3 months. The 43,000 points that we now have are worth $430 which they will wire directly to my bank account. Or, you could exchange the points for various gift cards.
2. American Express Platinum – We had an American Express Gold card, the only one I would pay a membership fee for a I believe it is an important card. They offered me 50,000 miles to upgrade with a cost of a $450 annual fee. I have just done this for the second time in 4 years, the last time they let me use 45,000 to may the fee. That leaves me with 5,000 extra miles “profit” and many advantages to having a Platinum card. One advantage is a $200 credit towards the expenses of an an airline of your choice useable for food purchases on board, luggage fees, etc. You also get access to many Fist class lounges. You can eat plenty in many of them and save some money that way.
3. Chase Disney Visa – I found a deal in one of the many Disney FB groups that I belong to where a person would get credit for signing me up and I got a $200 Disney gift card for spending $500. 2 of my garage payments cover that. My hubby and I both did it and that $400 came in quite handy as we are try to be Disney regulars.
4. Citibank Aadvantage – A couple of times I have gotten 30,000 for signing up. That is a free domestic trip.
5. Capital One – I do not have one but my parents say it is their favorite and I did not have a fifth option on my own! This is a good cash back /airline miles option.
Regarding store cards, I rarely see any deals as good as the above so I never use them. Ever.
Never get a new credit card unless there is something in it for you! And if you know you have a large purchase coming up, consider getting miles from a new credit card deal!
My last bit of advice is to join every hotel and airline club you come into contact with. You never know when you will be using them again and you never want to have a lost opportunity. “I am never going to be on that airline again, my company made me take that flight.” Do you have a crystal ball? How do you know things won’t change or a merger won’t happen? It cost nothing but a few minutes of your time.
My husband and I paid off our credit cards 2 years ago and never looked back. i closed my account out after I paid it off and we kept my hubby’s open, but pay it off monthly.
It sounds like you can get some great rewards from some credit cards. We have one card for an emergency and aside from that we always pay cash.
These are all great tips. You’re so right about joining every club you can find. It’s always best to have all the options you can.
Great tips, especially with so many wanted to start 2015 right. I think lots can learn from your experience
My son keeps getting spam credit card mail stuffed into his mailbox. It’s good to know which ones are good options.
Your son can sign up through https://www.optoutprescreen.com/?rf=t to eliminate these mailings – he will continue to get offers from companies he has or had a business relationship with.
The hubs & I hate having a credit card balance so we pay it off every month in full – so it keeps us from free-wheel spending – we only spend what we have. We have one card that gives us miles, one card that goes to the kidlets 529s and I have the Disney one myself!
Credit cards with good perks are definitely worth it as long as you don’t wrack up debt. These sound like great options.
We just use our credit cards to get gas cards for our vacation
I’ve had a few of these cards, others I’ll look into going forward like you said you never know when and how you can use them.
I am a member of so many hotel rewards clubs, and I always forget to use them! I need to make a list to reference before making reservations. Hopefully once we start traveling more, they will come in handy!
I love getting all the different rewards from my cards. Using your cards to earn all the points paying your bills would add up quickly.
I’ll have to look into these. I don’t have any credit cards- we just pay cash. But if we paid them off every month, the rewards would be worth it.
My husband and I are currently paying off all of our credit cards, and using them only for emergencies. I would much rather not worry about all the debt!
Debt free is the best way to be,I used to have credit cards but paid them off and closed all our card accounts.I do not want any credit cards to much of a temptation to end up in debt.
My husband has us all set up like you. We charge EVERYTHING. We write almost no checks. We pay of the entire balance every month. He has his 401K maxed. He’s got it set that the girls college funds will more than pay for college when the time comes. And, somehow he’s figured it out that our house will be payed off the year before Zoe graduates high school. He’s like magic or something.
That said… I sure would love to convince him to save a wee bit less so I can fix up the bagillion things in our house that need fixing.
So there is hope for me to become financially better by the time I am 50. Let’s hope my husband is on board with that idea.
I would love to know how you guys paid off the $150k student loan debt! I really need to get my rear in gear and tackle my own $100k in student loans. Of course, that would require me to really shake up my income.
As for credit, I have some. We are working towards paying them off. I would like to close every single darn one. I would like to keep my Capital One card. I get cash back rewards with it.
Great advice, Daddy Mitch!
So very true! I nearly have all my credit card debt paid off and just have student loans. I ended up going into a debt management program to pay it off quickly. Best decision I ever made and royally helped my credit score! We live off our American Express and Discover for the dollars back or points, but pay them off each month 🙂
Yes we only have cards tht give us rewards. My husband travels internationally often, so I need a card that had no foreign transaction fees.
Mitch, these are great tips and great advice! Thank you for sharing this post. I am actually looking into getting another credit card (for the perks) so this was super helpful.
I wish we would have had that Disney Visa when we went last October. We noticed they had special photo opps for just the Disney Visa cardholders that we would have loved to have gotten in on!