Question

Let's talk credit cards.  Do you still use them.Let's talk credit cards. Do you still use them. How do you do it. I know so many of us have tried dave ramsey. But those that aren't fully committing our want other options how do you handle that. This group is about behavior. Savings. Learning. Budgeting. Do you cut the cards or do you keep?  

Answer 1

Because closing accounts has a negative effect on credit scores, we are keeping cc open. Every couple months we use one for a tank of gas or some other smaller purchase and pay it off with the first billing cycle.  

Answer 2

We kept them and treat them more like a debit card. We have a spending limit we stick under and pay them off every 2 weeks (paydays. ) So we spend $100 or less each and make a $200 payment every 2 weeks.  

Answer 3

Keep. We are trying to raise our credit. We have a high limit so we only spend what we can pay off the next day (gas, online purchases with money saved from envelopes) and it raises our score.  

Answer 4

I cut and closed all of my cards when I started because my behavior was still crap. I would buy crap when I felt down and even after cutting them I could get the numbers and still use to shop online. I have since opened one. I pay my gas bill every month with it and then pay it off because I do want it to help my credit. So far happy to report no impulse buys :) I think alot of it has to do with behavior and yes I started with Dave and still very much agree with him. However I do need to improve my credit score because I do want to buy a home eventually. I encourage you to do what works for you.  

Answer 5

I keep them. in a very safe place where we can’t use them.  

Comments

@entrechat984 why do u have them if you don’t use them?  

Answer 6

Cut and closed.  

Answer 7

I stopped using them temporarily when I first started this journey because cards were maxed out. I now use my 2 cards that I get cash back on because I can choose to have cash back go directly towards paying off the card. I only buy what I budget for and pay it off immediately.  

Answer 8

We have ONE physical card we do use and payoff every single day. I have a reminder pop up at me to log in, check charges to make sure all are correct and then I pay our balance in full for that day. The other credit cards we technically have the accounts open but don’t have any cards.  

Answer 9

Husband and I both keep our credit union cards on us, all others are set aside. (I do hold mine) and if there’s an unexpected expense Ie vet bills or something, I’ll have my husband or myself use the card. Then I have 2 weeks to plan to use the next check to pay it off. It’s usually under $300 and it’s typically for vet bills since we have aging pets. It’s not an issue and I rather handle it this way than a sinking fund. We also have the wiggle room in the budget to pay it off in full with the next check.  

Comments

@eliaeliades14056 I was going to say the same thing. My pets are aging too & there’s always an unexpected vet bill here and there. I also travel for work and have to expense my airfare, rental car, and hotel. So I use the credit card for that and pay it when my expense reimbursement gets deposited (usually in a couple weeks).  

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@anemography yeah I wouldn’t want to use my debit for that either.  

Answer 10

I use my cards every few months to keep them active. I buy gas with Walmart card, maybe a shirt with macys, and something else small with my credit union card. I let the balance report to the credit bureau and paid it off. My credit utilization is literally 2%

Answer 11

We only have one CC and just laid it off after having it maxed out for 10 years. We really need our credit scores to improve so I have Hulu and Disney charging time it every month and also any (budgeted for) online purchases go on it and I pay it off with budgeted money in full each month.  

Answer 12

Dave Ramsey is the way to go. People think it's not for everyone, but it is. Discipline is key. If you cant discipline yourself then no method will work. Cut the CC. When you have money, u dont need CC neither a credit score. Cash is KING.  

Comments

@dehumidifier but is that strategy really possible for a lot of people? Who can buy a house cash before they die lol

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@ceramics761 Everything is possible! I mean look at Miko, shes doing it! Dave Ramsey did it! The headquarters he just built was all paid for in cash and it was thousands upon thousands of dollars. Discipline, Discipline, Discipline!  

Answer 13

Everybody is this group i can pretty much say is dave-ish but full on board miko! I personally don’t have cc’s but some travel for work and need one, some like the points and cash back, some just don’t do cash but find it easier for them. Its what works for you.  

Answer 14

I recommend keeping them and act like it’s a debit card for a few months to learn new spending behavior. Make a purchase then pay it out of your checking account the next day

Answer 15

I think it depends on what your “vices” were when you were not tracking expenses. Did you use your card without regard previously? Then I’d probably cut it up. Or is your debt from non-consumer things like student loans? Then I think it depends on your self control. Our debt was not credit card debt. I have always used our one card to put the bulk of our expenses in it, but paid it off in full at least once a week and stuck to our budget. So we kept the card, even doing DR. I suppose this puts us in the “DR-ish” category. We have one card, a SW airline card, and haven’t paid for a flight in over 10 years ‍♀️ I will say though, I recently switched to cash for some categories and it really does have a physiological component. I am much more apt to spend below budget with cash.  

Answer 16

Get a CC with no annual fee and cash back rewards. Use it to pay for everything that’s BUDGETED FOR and pay it in full EVERY MONTH. Last year we got over 1K in cash back.  Credit cards had no rewards when DR wrote his books and he’s not going to change his mindset today because that would be ridiculous. I am not on board when DR says Snowball over Avalanche because it contradicts his other principles! Let’s say I can pay off 20K in 18 months, with Avalanche I’m paying $500 in interest and $2300 with Snowball. How’s that logical? Go see any finance expert and ask them these questions. It’s a no brainer.  

Answer 17

It depends on the rewards and if they are relevant to your life. I travel a lot internationally. My card is a good travel card. Cut up the ones that don’t make sense and keep the ones that do.  

Answer 18

We use a credit card for pretty much everything (we still have budget categories that we stick to) and it gets paid off with each paycheck. We have never had a problem with credit card debt though (and have no debt besides mortgages). We get points for traveling which saves us money when we travel.  

Answer 19

I still use them for the rewards but only for things I have budgeted for and I make sure I never pay any interest. But after getting out of debt, I’m very disciplined because I never want to go back into debt.  

Answer 20

Both my spouse and I have one each. We do our travel expenses like flights, cars, and hotel on the credit card. Use them on some websites too. I already have the money for whatever it is, in the bank. My credit card gives me insurance for cars or protection on website. Its invaluable for that.  

Answer 21

Ive stopped using mine but havent cut them up and I dont carry them on me. I always have to ask myself if something is a need vs a want and if what Id use the credit card for is deemed an emergency.  

Answer 22

Nope, don’t have one.  

Answer 23

I have 2 major credit cards and 1 store card. The store card has no balance, but I keep it open. Both my major credit cards have balances and I’m actively paying them off. Chase just increased my credit limit, probably because they noticed I wasn’t spending on the card. but I’m not using it!  

Answer 24

Mine is cashback. I use it for gas for sure. But I pay it off right away. I keep the money in my chequing that I would've used for gas then when I use my CC I transfer it over.  

Answer 25

I had a bunch of credit card debt. I can officially say I’m a credit card debt free however I rolled all of my debt into 1 payment through Lending Club loan. I owe $13, 500 on that which was all credit card. I closed all of my credit card accounts except for a few store cards that I frequently use here and there. I have to say it feels so good to have that pressure of how am I paying these off every month and still have money for groceries!  

Comments

@sainfoin I did the same in Sept of 2018 I’m almost done with my lending club loan. but it was so great to go from 9 min payments to just one to lending club. It’s really helped me curb my spending.  

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@aristaeus exactly this is the 3rd time I’ve done this and I finally had this time stick. I have no choice it’s not just me now that I’m supporting. I have my son to think about and I can’t be careless with my spending! Funny how it takes having kids to kick us into shape financially!  

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@sainfoin we got this!  

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@sainfoin how does this work if your credit score is tanked? I have never missed a credit card payment and I do have a job but I am so tired of paying 8 different credit cards and just paying the interest! I can’t snowball yet because my job just covers the bills until I get childcare to work more.  

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Total up your credit card debt, once you figure out how much you need (give yourself at least extra $1000 cause they take a fee from the loan), put it the amount you need and it will be able to tell you how much your payment is a month. If it’s less than what your are paying combined currently with your debt it may be worth it. I had 4 credit card accounts in a debt management program plus 3-4 store cards, along with 2-4 more credit cards and I was paying over $800/month total now I am paying $300 less and still have $$ left over for groceries. It’s a weight lifted.  

Answer 26

I have one card that is still used actively for some subscription services and for some kids lessons that they wouldn’t do cash/debit payments for. I just factor in the payment as part of my fixed expenses

Answer 27

I live in NYC so not having a credit score isn’t really something I want to deal with. I have one card. I pay my utilities with it all on autopay. As they get charged onto the card I then pay the amount from my checking account. Track it as if I’m paying straight from there. I do not carry it around. I don’t have it on my Apple Pay. It’s not saved in my phone or on my computer.  

Answer 28

I believe Dave is right about them. I would spend less if I didnt use them but I cant get past the convenience and cash back factors. I automatically have my balance pulled on the due date which keeps me from overspending. You also get fraud protection and buyers insurance on certain cards that you dont get with a debit card. I also auto pay most of my bills on my credit card. I had something direct bill to my checking and had a horrible time getting it cancelled. The lady at the bank recommended using credit cards because if you find yourself in that situation you can just cancel. You cant do that as easily with your checking account.  

Comments

I now understand the fraud protection. I ordered something online with my debit card (it appears to be a fake company) and the bank will not refund my money until 30 days has passed. It may take longer. They said it's because I authorized the purchase. I have learned my lesson now. Even though I don't want to have a credit card in some instances they are necessary.  

Answer 29

I only use a CC for booking trips or rentals. Also, anything I buy online, but I must immediately pay it off.  

Answer 30

I cut every card but one for emergencies. It has been such a blessing in disguise to not have them around tempting me to spend!  

Answer 31

We have two cards. One is for groceries and gas. We end up getting around $60/month in free groceries because if the rewards it offers. Our second card is for anything else we buy or if my husband makes a purchase for the company he works for. This we get about $300/year in cash back. We have never paid any interest on either card.  

Answer 32

We don’t budget like everyone else in this group but I love all the sharing and ideas. We ONLY use credit cards! Purchases are separated to maximize points/rewards. This also allows me to easily track what we’re spending money on. I pay the balance every two weeks when we get paid.  

Comments

@ac810 Same! Use them like others would use a debit card, and pay off in full every payday!  

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@mackey I'm interested in knowing how this reflects on your credit. I think I'm headed to doing this. I have a card that give excellent cash back.  

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We have credit scores over 800. If you pay on time, and don't utilize much of the credit limit your credit scores will rise in time and continually stay in the excellent range. We are a good risk to the creditors. I only suggest utilizing rewards credit cards if you are in control of spending and budgeting.  

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Agree. It takes discipline so I think it’s important to know your strengths and weaknesses so you don’t end up in debt. Because we party the balance when we get paid, there is almost always a statement balance because these times rarely line up perfectly. So for credit reporting, it looks like we have a small balance and low utilization which is great for our credit score.  

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@mackey can you recommend some good rewards credit cards?  

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@diploma6601 I'm not going to suggest a certain card, but there are websites like credit cards dot com, and nerdwallet that show and compare lots of credit cards. There are others as well. Definitely get one with no annual fee, some have a straight up a set percentage on certain categories, and other rotate them every three months. I have one card that gives 5% back on cell phones, and that is the only thing I use it for. Again, DO NOT play the rewards game if you cannot pay your cards in full, you will accrue interest and that will completely negate any rewards benefits.  

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@mackey great! Thank you! I really appreciate your advice.  

Answer 33

Honestly, I cannot trust myself with a credit card. When I'm done paying them off for the 3rd time, I'm done. I'll probably keep my store card because I get alot of perks that outweigh the interest, but the rest I'll let close on their own.  

Answer 34

I cleared both of mine and closed them. Before closing the last one, I slowly built up a "credit card fund" which was the equivalent to the card limit. Now I "borrow" and payback myself.  

Answer 35

We use ours. We do a budget every month and use the card instead of cash. When we use the card i take it out of the budget right away. We lay it off every month then. We have one that gets points and have enough to pay for 2 tickets to London in July! You definitely have to have self control this way though.  

Answer 36

Keep. Not all of them mind you. You have to be DILIGENT. What matters is that the world requires credit for everything. So keep your oldest cr cards. Close all “store” type cards. Two to three regular revolving visa/mc type is all is takes. Use them sparingly on things you already buy like a tank of gas and pay it off. We alternate the cards each month for gas. Credit card A this month buys gas, i pay it in full. Next mo Credit card B buys gas i pay it in full. We do not use them for spending anymore period. If we want something, sinking fund it is. But they remain open and used and our credit is great. If i want to buy a house, i am golden. Heaven forbid i have to buy a car, same. If you treat credit responsibly there is no need to cut it up. If you aren’t there yet, this plan won’t work for everyone. just like cutting them all up and trusting that you won’t ever need credit again in your life doesn’t work  

Answer 37

We have one, it’s connected to our cell bill, bill goes on there on the 10th, we pay if off on the 20th when it’s due, it’s lowered our phone bill and helped our credit score

Answer 38

I almost exclusively use cards, never cash. Pay off in full every single months and get the points that we use for travel.  

Answer 39

I'm following Dave's plan, but I'm also not ready to cut up the cards. However, I went cash for all spending (groceries, gas, household, fun, etc) and only have bills or subscriptions go on the credit card, in addition to my husband's gas for work. The card is not allowed to be used for spending because that's where we get into trouble. I understand that Dave teaches having the card around allows you the "opportunity" to go back into debt, and I think for many people that is true. We have never had credit card debt, so being strict about what it can be used for is enough for us, but that may not work for everyone.  

Answer 40

I paid off all my credit cards. Now that my mindset has changed completely, I have the ability to use one credit card for all my purchases in order to get the reward benefits. It is paid off bi-weekly and logged in my checkbook as if I used my debit card.  

Answer 41

I use my credit card to pay for bills that I budget for to earn 3x points. It gets paid off immediately after all the bills for that pay period have cleared. But I’ve NEVER had credit card debt. My card has always been paid off in full every month.  

Comments

@idem same!  

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Same here. We have never had a problem with credit card debt but we are very strategic with what we can use the card for. Gas, groceries, household items, and some meals away from home, but only if the things are on the list or planned for.  

Answer 42

I have a credit card that i use for gas. I get 2% cash back on all gas purchases. So I use it then I pay it off. I don’t even wait for the end of the month, I just pay it off as soon as the transaction posts on the card so just a few days later. I just recently got a Disney credit card because we are going to Disney. Right now I’m using it for all my purchases to rack up points. But then every week I pay the balance. After we go on our trip, I think I’ll use it just for groceries. The key is to use your credit card like a debit card. Track your purchases and still follow your budget plan exactly the same. You just use the credit card instead of the debit card.  

Answer 43

I have kept all mine. I owe $150 to one. I don’t need to cut mine. Credit cards are easy to not use. My struggle is keeping savings where it belongs

Answer 44

I kept one for work since my work requires me to pay for travel and they reimburse me the next week. i never buy anything that isn't reimbursable. if i do it comes out of my fun money envelope. but thats the only one i have, everything else has been cut up

Answer 45

Yes, but I use them like cash. So, if I spend $28. 42 at the grocery store, I come home and make a payment that same afternoon.  

Answer 46

I am Able to control my spending. So I use a credit card with rewards that I pay off monthly for specific things I already have cash for like gas, misc, etc

Answer 47

I still have debt so I don’t use them right now but once I’m paid to zero my card has perks that I love so I think I will still use it for gas and groceries. I think what I’ll do is keep those budgets in my chequing and as soon as I make a purchase, make that same payment into my credit card. Then you never get carried away. It’s just like using your debit card to buy something.  

Answer 48

I finally paid off my chase card. Now every purchase I put on it I write down in my planner date of purchase, where, and amount. I will only put charges on it that are in my current budget, like food, gas, etc. It's easy for me to over spend with a credit card so it is a struggle of mine.  

Answer 49

I freeze them on nf. Pay them off within the month.  

Answer 50

I love the protection that American Express brings. They always have my back.  

Answer 51

I have already paid off a couple of credit cards and I’m keeping them open to help improve my credit. I’m also putting revolving expenses on them so they don’t close. For example: my gym membership. I pay for it every month anyway so not I am putting it on one of my credit cards and just paying it off each month. But I gave them to my mom to keep for me so I don’t use them.  

Answer 52

I keep them and now only use them as “envelope” money to keep my credit score up

Answer 53

Friends and coworkers have had too many issues with debit cards, so I stick with credit. I'm on a budget, don't spend over it and pay every month. Although , as Dave Ramsey loves to say, I'm not getting rich on rewards, I do get free airfare and cash back. I think if a person is really impulsive, a credit card might be a bad idea.  

Comments

@labyrinthine working on that impulse behavior is my goal. I don't think it's too bad but it's definitely not worthy of me carrying them on my person for now. I put them away and haven't used them since August which is a HUGE win for me!  

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@uredium that is an accomplishment! When you see progress on the financial front, I think you will develop an attitude of " not going back there".  be proud of all your little victories

Answer 54

I use mine for gasoline and online purchases. I Pay it in full every month!  

Answer 55

Not everyone who uses a credit card goes into debt. We use them for convenience, but never buy anything we can’t pay cash for. We pay off the card monthly. If someone has a hard time controlling their spending, Dave’s advice is great. But it’s unnecessary for many of us. Reviewing a credit card bill can also be a check point to stay on top of unnecessary expenses.  

Answer 56

I only use my credit card for gas to help build my credit more, when I get to a good credit, I’ll cancel it.  

Answer 57

Right now every single one of them is maxed out. I plan to pay off as many as I can with my tax refund because it’s not a lot. But I will be cutting them up but keeping open for my credit. My dream is to buy a home in a near future. Right now I cannot trust myself to rack them up again.  

Answer 58

I have 2 credit cards. I plan to cut up one once it’s paid off and plan to keep the second one. I have a couple things that can only be paid by credit card. I will pay off the balance each month

Answer 59

I use mine for gas as well so much easier w a toddler

Answer 60

I travel for work, and am reimbursed. I will always use a cc for this. I have very small things, like ezpass, and netflix that go onto other cards each month to keep them active. Those small balances ($25 and under) get paid off monthly. You can use credit cards responsibly. Its just hard to not swipe for everything, which is why I use cash.  

Answer 61

Lots of great advice! Thanks everyone!  

Answer 62

I keep a few because I will put large purchases for points, but only purchase if I have the money

Answer 63

I cut them up years ago. You really can get by with a debit card. I never want the temptation in my hands again. Life is so much sweeter debt free and on the cash system.  

Answer 64

I keep mine open for emergencies. I have an expensive pup.  

Answer 65

We use our cash back credit card for gas and groceries or if we get a big unexpected hit (like my dogs surgery bill last month)! We still only spend what we budget for though and then pay it all at the end of the pay period! We then use the cash back points at the end of the year to help cover Christmas costs! We paid $0 for our kids Christmas gift this year!  

Answer 66

We haven’t used a credit card since 2017. We don’t miss them either.