We all know credit cards are a fact of life. I personally have very mixed feeling about them but have several and have come to terms with the way the world works. Most of time my credit cards are imprisoned in a jar somewhere idle waiting for me the warden to use them or release them from their jail sentence. I was a long painfully stressful road to get before getting to that point of restraint. They were like crack to a crackhead, and my name was Pookie, or Tyrone Biggums (New Jack City and Dave Chappelle reference). I strictly use a single credit card for an express purpose which I will detail later in this post(See number 5).
The road for me was battling credit card debt, until my wake up moment back in 2010. After looking at my various credit card balances and wondering what I had actually purchased, most of which I could not identify, the hard decision to eradicate those balances, like they were cockroaches. I hustled, worked, sold stuff, and did nothing many Friday and Saturday nights except workout, play video games and read Facebook walls.
Here is what I learned:
1.) Only have a credit card that you can pay off in full within 30 days, max length 90 days paid in full worst case condition with no new purchase on the card. Having a credit card requires some discipline and willpower. I believe in you can do it!
2.) Sign up for your credit cards company’s website to get alerts, and manage your account. Sounds simple but it makes making payments much easier in case you have one of those lapses in judgement when the payment is due and need to pay it right away.
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3.) Set up a credit card auto pay. When the payment is due it is paid on time, period! Make sure you have the minimum payment required in your bank account when the payment is due. If you have problems balancing your checking account, or are a debit card maniac then be careful so you don’t acquire overdraft fees. It will defeat the purpose of auto pay.
4.) Choose a card that has cash back so you can get more than just an easy way to spend money. I use my cash back and perks for things like birthday presents, and gifts for others so I don’t have to keep running to the store.
5.) Use your credit card as a debt manager. This is the parts I’m talking about from the earlier portions of the post. I have one credit card used for paying my recurring bills such as Utilities, internet, subscriptions and such, you can even do it for your rent in some places. Many places will accept credit cards for payment and I actually wish more would and here is why.
I have all my bills going to one central location so that I know they are being paid on time, I can dispute them if it is wrong, and I have one overall bill to pay at the end of the month.
You have no idea how putting your bills on autopilot can affect your life for the positive. I travel a great deal and the last thing I want to do is get off a plane and try to pay a bill. So here is the perks of number 5 in this list, bills paid on time, cash back, no STRESS! I have an alert in the calendar on my phone telling me 3, 2 and 1 day before my credit card payment is due. That alert goes across all my computing and smart devices. I also do this for the other bills hitting my credit card.
6.) Chose a credit card that is no greater 1.5 times your monthly bills or 75% of your monthly income so that you can’t really get out of control. If the credit card company increases your limit and you have not gotten a raise call them and ask if it can be lowered back to the original.
7.) At least once a year if you payments have been on time for about 8 ~12 months, call the credit card company and ask for a lower interest rate or if they have a better program than the one you are currently enrolled. If they don’t want to help you tell them you will stop using the card and cancel.
Now go live The Billionaire Lifestyle