Credit Cards
Millionaire Nurse wannabes’ know intuitively that paying fees and penalties on your credit cards are major no-no’s. I would say that using credit cards at all is not the best road to travel on your path to financial freedom and wealth.
I don’t want to be a hypocrite so I confess I do have a couple of credit cards. I have a Delta Am-Ex because I travel overseas enough to use the points for plane tickets.
I have a GM Visa card that we obtained years ago-when I would buy a new GM vehicle every coupla years… (that alone should tell you how old the card is.) I was once a very baaaad boy….
We pay our cards off every month-no balances.
Studies show spending is greater with credit cards rather than when paying cash. We have replaced our card use with cash over the past couple of years. We now use cash for purchases-more than 85% of the time. I would say we could cut up our cards tomorrow and not miss them.
www.mint.com/blog has posted a graph and breakdown of credit cards and their various point schemes. One stat that got my attention was that if you are late with a payment, it will take $3,900 worth of charges to earn enough points to pay for the penalty.
That should be enough reason to not to be late for a payment, and make you wonder about the true benefit of the various credit card reward programs. The bottom line is, unless you fit a very narrow set of criteria, the disadvantages and costs of various card point schemes are not worth the risk of overspending, fees, and penalties.
I have a free ebook for Emergency Money Resuscitation for nurses at my website, www.themillionairenurse.com. If you sign up for the free ebook, you will receive a free mini-course on money management by email. In that free mini-course there are several great tips on credit card management.
So here is your homework:
- Review all your credit cards-find out what the rewards are, and have you been late with any payments.
- Begin to payoff your cards monthly.\
- When you are out of credit card debt-destroy them.
- Try to keep your balances below 50% of your limit- this helps your credit score
- Cancel your store cards-they have higher interest rates and increase your spending temptation.
Good Luck
Tags: credit card balances, credit card reward programs, credit cards, paying off your cards
