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After 7 years clawing my way to economic respectability. I began playing the credit card rewards game, challenging what I thought was better judgment. I find the game keeps me focused and helps with the management of my health & personal budget charts. I was leery about entering that world again, but in this day & age of modern technology a card is almost a must. It was a mine field because of my previous experiences with credit. I only hope with age & overcoming my former situation I can handle my credit more responsibly. Many hard lessons had to be learned, I therefore stay on top of it.

I've made money, mostly from the bonuses, but since I limit myself to my activities & income, it does gives me an innocent diversion for my idle time. I have acquired 3 cards (my optimum) that are cash rewards only. I earned sign up bonuses on all 3. My FICO scores average in the mid 700’s, they say I need a mortgage & 2-3 more credit cards to raise it??? I did purchase a used late model auto last year (1/3 down balance financed under 5% for credit purposes). I researched, got a good buy & am totally happy with it.

I have 3 fixed liabilities: wireless, electric & streaming paid by card ($180 monthly) my ISP ($40) is discounted if I use a credit union direct debit. I have also cut the cord - 4 years ago, no more cable fees or land lines. No personal loans or mortgages. I have no other debt than my auto, my income is adequate with a pension & Social Security.

I use my VISA (2.0%) everywhere especially if they will not give me a cash/senior/AARP discount. I always ask, maybe 20% of the time that is successful. The bulk of my ‘rewards’ come from the unexpected surprises & needs I have encountered. I established a revolving slush fund that covers my annual expenses IE: homeowners & auto insurance also membership fees (CostCo, AARP,,,etc.). I keep it funded by my tax refund every year. I pay my insurances in annual or semi annual charges avoiding the hidden convenience fees. I created a separate emergency fund to cover any large unexpected surprises.

I changed my withholding to maximize my refund, most financial articles want you to avoid that but I find what with the horrible interest rates banks are paying on savings it makes more sense to me to let the government hold it until early spring then send me one lump sum. It also helps avoid the dreaded tax auditors. The most I could hope for otherwise is maybe a little more than a $10 gain, I can make more than that paying the annual payments with my card then collecting the rewards.

My Opinion about CREDIT LIMITS:

I’ve been reading reviews of different cards, mostly about the credit limits. My approach to the game is geared towards obtaining cash back, avoiding debt & fees, keeping my budget in line with my income. I’ve read some are receiving opening credit limits of 15K or more. Why I ask myself would I want or need any more than a 1-1.5K limit? Although one I opened came with a $3K limit.

I save for all purchases, so that I can pay them off as soon as they post & deposit the rewards. If I was seeking a mortgage I would definitely be asking a company or bank who specializes in making mortgage loans, the interest rate is much lower. The game of having cards is controlled by your FICO scores of the 3 major credit rating companies, Experian, Equifax and/or Transunion. Each of these use the algorithm based upon debt to credit limit along with other factors. The lower the percentage the better it is for your score. I did have one payment refused because it hadn’t been 3 days since the previous one, a new wrinkle to my budgeting!

Paying the cards completely off every month is my goal, owing less than 3% is best and carrying a debt ratio just above 0 is desirable, I choose to pay them off completely, easier to manage. They want you to carry debt but not much, shows the creditors that you can handle your finances. To have 4-6 cards each with 5K plus limit puts you at a 20-30K limit, if 3% is great it means you should be carrying somewhere between $0 – $900 month to month. I don’t want to have that much debt or need that much ‘stuff’. Close to $0 is my goal. My accounts show activity but no debt.
 

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As long as you keep things under control as you're now doing, you should do fine.

I'm not sure exactly how the FICO score game is played, but having a good credit score is essential. For instance, a low score gets your insurance premiums rated upwards. Years ago my dh and I agreed that any credit card not paid off 100% each month had to be cut up. I have no debt and three credit cards. I use one for a couple months, then the next in rotation paying the balance each month. Since I don't spend much I don't worry about rewards. My credit score is around 820. I keep getting messages congratulating me on paying off my balance so I assume there is a computer somewhere that recognizes a zero balance without considering I never carry a running balance.

I have friends who use an airline miles card and pay 100% of their monthly expenses with the card. They pay the balance monthly and collect the miles so they can travel to visit their children around the country.
 

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It seems that it is working out well for you. At least, that is what I got from your post. Also, I love that you mentioned that it took you seven years to claw your way to economic respectability. People, for some reason, believe they can learn and achieve it overnight. Working out your personal finances EFFICIENTLY is not an easy thing to do. That is also the reason why most of my colleagues (I am a doctor) prefer to use services such as Financial Planning For Doctors instead of managing the money themselves.
 
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