CC use

[RuthNY]

Has/does anyone here use their cc for their day to day expenses instead of cash then pay it off every month? I pay my Discover off every month but I tend to put so much on it that when I pay the bill I have no spending money left

How do you jump start so that you have the money AHEAD of time THEN use the cc knowing you already have the money to pay and know how much you have to spend?! I'd like to be AHEAD of the game not play catch up every month.

[thrifty gal]

Dh and I have a limit on each of our ccs, that we set ourselves. We have a total of 3 credit cards. One is for clothes, one for the house, and another for emergencies (an emergency that our EF couldn't handle). We do not spend over $100 on our clothing card, our limit on our house card is $200, and we don't have a limit on our emergency card.

Say, we spent $100 this month on clothes and used the clothing card. We will not put another dime on this card until that $100 is paid in full.

That's just what we do!

[homesteadmamma]

My advice - don't use cc.

With minimum payments going up from 2% to 4%, if you ever find that you can't pay off the amount owing each month, you'll be in trouble. Anyone who has cc should be concerned about this. We always think that nothing will happen. However illness, loss of job, etc. can quickly cut our income.

Here is an article on this:

http://forum.freeadvice.com/archive/.../t-245757.html

Are you ready for higher minimum payments?

[sas58]

Well we don't use our cc's for day to day expenses per say. I have a separate checking accout for groceries, cleaning and HBA products, so we use only checks or cash for those things. I usually get a small amount of cash out for purchases under $10.00.

We do use cc's for things like ordering my prescriptions online, gas fill ups for the cars during the month, ordering other things online, etc. BUT we NEVER use them for things we don't already have the money set aside for and the balance is paid in full each month. For us it's more of a convience thing having everything in one place and not having to write so many checks, plus getting to keep the money in the savings for a little longer.

What I did was track ALL our spending each month for several months until I came up with a workable budget that also showed me where we could/needed to cut back. DH gets paid every two weeks so each payday a specific amount is put aside for funding not only our savings for irregular expenses, i.e. auto ins., property tax and ins., Christmas, medical expenses, clothing but also for our regular monthly bills, truck payment, electric, phone, etc. Then whatever we do use the cc for (say we bought clothes) that money is then moved out of that subaccount to checkings then the bill is paid.

Around the first of the month I take out enough cash for the budgeted monthly amount for spending money for each of us, meals out, and a small amount for miscellanous (usually used for postage stamps). LOL, we are the opposites of most people, cash has a way of slipping away much too fast, so that's why we prefer to use checks or cc's, because we find we're are much more careful in our spending using them than cash.

A good way to jump start for us was to be very, very careful in our spending and using any extra money (O.T.) to build up the savings account to get things to the point that at the end of each month we already had next months expenses in the savings account.

[PrairieRose]

You could always use your check register and instead of using a ck# you could write cc5/31 or something to reference the date of the purchase. That way when you charge you enter the charge as money already spent which is what it is...you should be able to track it that way fairly painlessly and not get behind.

We use our credit card for almost every purchase. I'm very careful not to overspend and I pay it off every month. The reason we do this is b/c we got lots of free airline tickets. And I always pay before the due date (allowing time for mail delivery) so I never pay any interest either.

[Darlene]

Originally posted by PrairieRose
You could always use your check register and instead of using a ck# you could write cc5/31 or something to reference the date of the purchase. That way when you charge you enter the charge as money already spent which is what it is...you should be able to track it that way fairly painlessly and not get behind.

We use our credit card for almost every purchase. I'm very careful not to overspend and I pay it off every month. The reason we do this is b/c we got lots of free airline tickets. And I always pay before the due date (allowing time for mail delivery) so I never pay any interest either.

Good Idea, Lisa. We too use our cc exactly like you do and get a cash back bonus.

[voodidit]

I know longer have any CC's, except for my check card which has the Visa logo on it and it comes straight from my checking account, otherwise I would prolly be even broer than I am now

[Mojjo]

We do what PrairieRose mentioned and write it out of the checkbook as though we paid cash. Then when the bill comes we write the check and it's done.

[Englishlady]

I tend to use my CC for on line purchases and also for things that I need a record for for the Tax Man. (Petrol & work related stuff for DH).

However, unlike most people I then get the CASH I have just spent and put it in an envelope with the date, amount spent and to whom I paid it & then put that away in the safe until the CC Bill comes in. ( I do this because I can't pay cash through the Internet!)

If you keep the "Home made receipts" together and have a look through them, you will see how much you are spending BEFORE you commit to spending any MORE money....



In order to get ahead, you could just allocate the money you WOULD have spent into the system, but without spending it on the CC, again making a note in your "system".

The problem is a lot of people dont' think of CC as "Real Money" and unless you can get in to the mind set that it IS and that if you don't pay it off in FULL then it will cost you more......then it might be safer to not use it or pay cash

I use mine as a Security tool, no one makes a cent out of me

Karen

[Jerseygirl]

I have american expres and use it for everything, gas, groceriees, etc. I have a good bonus points program and for some reason I tend to respect it more than cash--cash goes right out of my hands--vending machines, bigger tips, the girls at work taking collections for everything under the sun ...... With the card I stop and think before I use it. I pay by phone every month in full, pay by phone has saved me from late charges too.

[rumrunnergirl]

I use our CC for just about everything. I may even put our internet cable bill on there, and if I could put my mortgage on it I'd do that too (I might be able to, I haven't checked into yet).
Whenever I charge something, I write it down on my budget sheet so I can track it, and I pay the CC bill in full every month so I never pay interest. I get points for every dollar I spend, then I redeem the points for gift cards, so in essence I'm getting paid to use my CC. I'm not overspending by using my CC, as I would be buying the groceries or gas anyway, and I have a budget for everything and I try to stick with it.
Unexpected things do come up, like last month I had an ingrown toenail ($390), so the doctor visit went on the charge and then I hustled and put some stuff from around the house up for sale in my picturetrail albums so I could pay the doctor bill, and then tried to come under bugdet for the month by buying less groceries, didn't fill the tank last time I got gas for the month, etc.

[RuthNY]

Wow, what great responses! I wish everyone put in as much thought when using their cc as you all do. Maybe they wouldn't get into trouble so much.

I'm curious about the suggestion of using the check register. I thought of doing that too but I can't figure out how to keep that from getting too complicated. Lisa, it must be a nightmare to balance your checkbook. I was thinking about maybe highlighting those setback amounts so that it'd be quicker to total. Or maybe using a seperate register just to keep track of amounts on cc.
Karen, I also like your idea about taking out the cash and putting it away.
I guess I still need to think it out. Right now all three of my cards are in the freezer so I'm not carrying them with me.

[jlxian]

Never for day to day expenses.

We do use credit cards for gas and online prescriptions and other online purchases. I make every effort to pay off the balance each month.

We have just sent for a Discover card which we will use for these things now, and we plan to get rid of my husband's mastercard.

[Jayne]

I have learned the hard way that I can not use cc's....we had to refinance to pay off a huge cc debt and I still have a few small ones I am working on....I always started out with intentions of paying off my balance every month but it never worked out that way...so no more cc's for me

[rumrunnergirl]

This seems to be the real issue here:

Originally posted by RuthNY
I pay my Discover off every month but I tend to put so much on it that when I pay the bill I have no spending money left

Are you using your CC for "day to day" expenses that have to be paid for anyway, whether with cash or CC? If you paid cash for these same expenses, would there still be no spending money?

In other words, if my grocery budget is $250 for the month, then it doesn't matter whether that $250 is paid for out of cash or on the CC - $250 is $250. However, if I put it on my CC and spend $300 per month when I have only budgeted (and can afford) $250, then I am overspending by using my CC, and I should switch to cash to stay within my means or track my CC spending better. I don't think it matters how much you put on your CC every month, it's more of "are these items in the budget or are they impulse purchases".

Am I making sense, LOL?