What Using a Credit Card only for Three Months Taught Me

A few months ago, I mentioned that I was going to try using only our credit card for expenses to see how that would work for us.  We have a rewards credit card where we get cash back on certain purchases (4% on gas, 3% on movies, 2% on restaurants and groceries, and up to 1% on everything else) so when we use it, we do reap rewards.  We always pay this card balance off every month because it has a high interest rate- probably to make up for the rewards.  In October, November, and December I used the credit card for all our every day purchases- gas, groceries, cable bill, household items, Amazon, etc. We actually ended up hitting the $100 threshold to receive a rebate check and in December when we received our statement it was attached- $127.32.  Obviously free money is nice and it’s not like I had to do anything extra to earn it.

However, I don’t know if I like using the credit card only.  Here’s why:

  • I like using our debit card for every day purchases because the money immediately comes out of our checking account.  I actually keep a check register, so it’s very easy for me to know exactly how much money we have at any point.  When I use the credit card, the money gets charged and the balance keeps going up and up until I make a payment.  I did make several payments throughout the month, so it wasn’t like it was a huge payment all a once and hurt a little less than if I had made the payment when the billing cycle cut.  It still hurt to make payments in the hundreds of dollars versus the smaller charges that usually go on our debit card.
  • I feel like we spent a lot more money when we used the credit card. Not having to write the transactions down made it almost like free money and it was easier to just swipe the card without having to think twice about it.  I can see how so many people get into the credit card trap and end up with high balances that take awhile to pay off.
  • I used to be able to make payments of whatever dollar amount I wanted to at any time to our credit card.  They changed it so that you can’t make a payment greater than what you owe, which I completely understand why, but it was so easy when I would charge gas or groceries and could come home and immediately transfer that amount to the credit card so I didn’t have to worry about doing it later.  I don’t like owing money.

I did like that it was easier to reconcile our checking account when we didn’t have multiple purchases to account for.  That part of it was great!  Going forward, I’m not sure what I  want to do. Part of me feels like it’s much better to just use the debit card and write the purchases down. I feel like when we use the debit card, we are much more intentional about how we spend our money.  I honestly can’t say that we made tons of extravagant purchases during the few months we used the credit card, but I feel like we did spend more than I would like.

Do you use credit cards and if so, what is your system?





October State of the Finances

Everything here has been a whirlwind lately since Mr. Money lost his job a couple months ago.  We’ve been trying to keep our heads above water, and I feel like we’ve been doing a pretty good job doing that so far.  One of the hardest things for me is when I have a million transactions to reconcile in our check register.  Yes, I still use one of those 😉 I’ve decided that I’m going to try charging everything on our credit card for the month of October and see how that goes.  It’s a reward card so we will get cash back on our purchases: 4% on gas, 3% on restaurants and groceries, 2% on movies, and up to 1% on everything else. I plan on paying it in full before the bill is due so we don’t get charged any interest.  I’m going to see if that’s easier for me or not.  Sometimes I think it’s harder because I don’t know an exact dollar amount of how much we have in the bank since transactions can pend on the credit card for days.

Mr. Money has applied for many jobs, had a few interviews, and probably only one really solid lead for a job.  Unfortunately, the company chose another candidate (probably one that had more sales experience) so he didn’t get that job.  He’s still looking, and is actually studying JavaScript, C# and .NET to further his credentials.  He would love to get out of the food industry and stop being a chef.  We’re hoping and praying a career change is in the future for him and that he loves it!  I’ve tweaked his resume and I had a few people look over it as well, and they said it looks pretty good!  He’s updated his Linkedin and some other software development groups to help him with his job search.

Throughout this whole ordeal, I’ve been very thankful that we live very frugally and that we don’t feel like our lifestyle has been drastically changed since he was laid off from his job.  Of course we’ve been careful with how much money we’re spending, we’re not going out and buying things we don’t need, and we’ve been cooking and eating all meals at home.  It hasn’t been the most fun, but we’re making the best of it and thankful for what we do have.  I have to keep telling myself this is a season and will pass and be a blip in the radar in not that long of a time period.  I’m so thankful that we are all healthy and safe and there’s a lot to be said for that.

I’ll be honest though- I hate this time.  I hate waiting, I hate not knowing, I hate feeling like everything is not going to be okay. I hate feeling hopeless.  I wish so badly that he hadn’t taken that job and that things were fine.  But you can’t go back and change things, you can only move forward so we do the best we can, put a smile on our faces, and trudge forward.

I’m going to try to do an update with tracking our spending for the month of October so I can share how using the credit card works out.  I’ll bet it will simplify things for us, and getting the cash back is an added bonus!

Have you ever had a period of unemployment?  What was the hardest thing you’ve experienced financially so far?


Top 5 Mistakes People Make With Their First Credit Card

Source: https://www.pexels.com/photo/administration-analytics- business-commerce-237675/

The new Credit Card act that came in to force in 2010 was set to provide protection to users. It made it hard for those less than 21 years of age to get a credit card and now many in college or leaving college are getting cards and committing the same naïve mistakes kids in high school did.

Getting your fist credit card marks advancement to new responsibility levels rather than just achievement. To make through it without being laden with a crippling debt and poor credit scores, here are five mistakes by first time cards holders you should avoid.

1. Failing to do a thorough shopping for best rates.

This is a common mistake people getting their first card do. Going for the first offer you get is a desperate move and denies you a chance to shop through different card rates in the market. The interest rate is the biggest factor to consider when getting your credit card and it affects the ease with which you get to pay the debt.

2. Going for rewards instead of looking through all factors in a credit card

Many credit cards will advertise placing their rebates and rewards like travel points at the front. You have to be wise to go beyond this because while all these rewards are great, they only make send and you only maximize them if you can make full monthly payments and at a low rate.

3. Failing to read the fine print

The savvy and smooth talking sales guys and bright adverts will harm sly give you time to get to the fine print. This is your major responsibility when going through credit card selection. Before getting one look at the fine print to determine factors like the total fees of getting and using the card, interest fee, minimum payment, when your first payment is due, interest rates on cash advances, penalties etc. All these factors will give you the real cost of using the credit card and help you know the better deal.

4. Making late payments

Making late payments results in late fees and even higher interest rates. It also leads to a poor credit rating score affecting future terms and amounts of loans you can get.

5. Making minimum payments

This may appear as a survival tactic but it hurts both your credit score and builds up a credit burden in the long term leaving you tied with a huge debt. Pay of your monthly balances in full and to make it easier you are advised to at least keep your balances at below 30% of your credit limit.

This way you build up your credit rating which is determined by how you and pay up your credit.


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