Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
How to switch to using credit cards for spending.
Old 09-12-2021, 07:55 AM   #1
Dryer sheet aficionado
 
Join Date: Apr 2006
Posts: 31
How to switch to using credit cards for spending.

I am wondering if anyone has any tips for converting from using a mix of debit card and credit to all credit cards for spending. Right now most spending goes on debit with gas, ordering food, ordering online going on credit. Would like to consolidate all on credit for the various often mentioned benefits. Obviously all cards will be paid off each month and we have no debt.
Thanks.
daverph is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-12-2021, 08:01 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
easysurfer's Avatar
 
Join Date: Jun 2008
Posts: 11,235
Quote:
Originally Posted by daverph View Post
I am wondering if anyone has any tips for converting from using a mix of debit card and credit to all credit cards for spending. Right now most spending goes on debit with gas, ordering food, ordering online going on credit. Would like to consolidate all on credit for the various often mentioned benefits. Obviously all cards will be paid off each month and we have no debt.
Thanks.
Isn't the switch as simple as switching any auto payments from debit card to credit card? In otherwords, go to the websites where you pay your bills and set the autopay to the debit card.

I have my autopays set to credit cards. Like the cash back bonuses .
__________________
Have you ever seen a headstone with these words
"If only I had spent more time at work" ... from "Busy Man" sung by Billy Ray Cyrus
easysurfer is offline   Reply With Quote
Old 09-12-2021, 08:33 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Apr 2010
Posts: 4,182
Just get a credit card (or two) and start using it for all transactions possible, including autopays.

Am I missing something?
brett is online now   Reply With Quote
Old 09-12-2021, 08:37 AM   #4
Full time employment: Posting here.
PaunchyPirate's Avatar
 
Join Date: Feb 2014
Location: NW Pennsylvania
Posts: 598
It's really just as easysurfer replied above.

1. Start using the credit card for all in-person expenses. I carry very minimal cash. I get $100 at an ATM about every 3 months or so. I pay for almost everything with the credit card. Gas, groceries, dining out, etc. I even use my card to buy $1.00 Diet Cokes at the McDonalds drive thru. Some places don't take them... my barber, my local garden market, etc. That's where I spend my cash.

2. If any of your recurring bills accept credit cards, switch them over to it and set them up as autopay from the credit card. For me this includes my cable internet, electricity, phone, AAA, health insurance, software/website subscriptions (streaming music, streaming TV, cloud storage, virus scan for computer, etc.).

3. Any bill that doesn't allow for autopay, but accepts a credit card, I just let them email me or paper bill me when due and I sign into their website and pay it when due. This covers my homeowners/vehicle/umbrella insurance.

Look back thru the debit card statements for 3 or 4 months. What is on that list that could be set up for autopayment from your credit card?

Once set up, it all sort of goes on auto pilot. These credit card rewards, whichever one(s) you use can really add up. As long as you're disciplined enough to pay the cards off every month and have the finances to do it, there is no reason to not do it.

I primarily use my PNC credit card for 4% off gas and 3% off restaurants. I use another card for everything else. That other card may vary depending on whether I'm chasing after a promotional bonus or not. If not chasing a promo, I use the Citi 2% cash back card. For the last 3 months, I was chasing 100,000 points on the Chase Sapphire card. I switched all the credit card purchases, including gas, restaurants, and all autopays over to that card for 3 months to get $4000 in spending. I got my 100,000 points. Now I will likely revert back to my normal patterns of using 2 cards. That 100,000 points could get me a round trip ticket business class ticket to Spain right now if I chose to use it. I'll likely leave the points in the account for now, and maybe add to it a little with normal spending. I'm still trying to decide what I want to do with it.

I don't really like to be CONSTANTLY chasing a bonus. But now and then, one comes along that is too good to pass up. I'm generally content to get the 4/3/2% cash backs from my 2 primary cards.
PaunchyPirate is online now   Reply With Quote
Old 09-12-2021, 08:56 AM   #5
Dryer sheet aficionado
 
Join Date: Apr 2006
Posts: 31
I guess I was thinking more along the lines of should we keep X amount extra in checking or anything along those lines. My wife is stuck on using debit as she is afraid we will not have the money to pay when the bill comes. I think itís more psychological than anything. Hope this makes sense.
daverph is offline   Reply With Quote
Old 09-12-2021, 09:03 AM   #6
Full time employment: Posting here.
PaunchyPirate's Avatar
 
Join Date: Feb 2014
Location: NW Pennsylvania
Posts: 598
Quote:
Originally Posted by daverph View Post
I guess I was thinking more along the lines of should we keep X amount extra in checking or anything along those lines. My wife is stuck on using debit as she is afraid we will not have the money to pay when the bill comes. I think itís more psychological than anything. Hope this makes sense.
No magic bullet. Just have a plan for how you're going to pay the bill when it comes. In fact, I think I find it easier since it's a once a month payment to the credit card instead of 35 debit card transactions that I need to constantly monitor if there is enough cash to cover it.

With the credit card, you will get a statement saying you owe $1534.45 cents. You generally have 2-3 weeks before that has to be paid without incurring an interest penalty. Depending on how you fund your checking account, you just need to move money in time to cover that bill.
PaunchyPirate is online now   Reply With Quote
Old 09-12-2021, 09:08 AM   #7
Recycles dryer sheets
Go-NoGo's Avatar
 
Join Date: Oct 2016
Posts: 340
Quote:
Originally Posted by daverph View Post
I guess I was thinking more along the lines of should we keep X amount extra in checking or anything along those lines. My wife is stuck on using debit as she is afraid we will not have the money to pay when the bill comes. I think itís more psychological than anything. Hope this makes sense.
Go into the credit card website and signup for text alerts whenever a charge is made. Then move the money into your bank account to cover the charge. After a few months when you are comfortable with your spending/paying patterns, you can stop them and just flag alerts of high value items.
Go-NoGo is online now   Reply With Quote
Old 09-12-2021, 09:19 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 12,872
It's pretty painless assuming you have a few useful credit cards with limits that meet your needs. (The 2% cards are a good starting point.)

Keep in mind when you switch to using CCs you will also increase your legal protections if you get into a dispute with a merchant. Or if the CC is stolen and used by the bad guys to buy fancy clothes from the finest designers in Paris. Your legal CC limit is $50 assuming you report the theft on a timely basis. Debit card protection is minimal from a legal point of view. Various banks have different policies on things like stolen debit cards and merchant disputes. Good luck with that.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 09-12-2021, 09:21 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 6,160
I too was not clear on the intent of the question. If you look back 6-12 months and tally high low and average monthly spending on credit +debit cards it should assure DW if you reserve the highest monthly total in a high yield savings account, sort of like a mortgage escrow. The next months bill is ďin the bankĒ and youíre accumulating funds for the billing cycle after that.

Now days itís very easy to track running expense totals using apps to access accounts.

With your credit card you can have very generous grace and float period before the bill is due. For me itís ~28 days that my reserve funds stay in high yield savings before the auto pay statement balance feature pulls the full payment. Iím using 2% cashback cards so thereís that too.

I have my main credit card loaded into my iPhone wallet so that makes contactless payments easier.

I realized I should pay some service fees to use my credit card if the fee is less than 2%. Sometimes I even pay 2 months utility bill to keep the service fee less than 2%. Paying utilities, home and auto insurance on 2% cashback card is sweet.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline   Reply With Quote
Old 09-12-2021, 09:24 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 5,071
Simply stop using debit cards. We do not use them at all because of the ease of reporting fraud and getting PROMPT action from CC companies. In the early days it took ages to get money back from a debit card fraud situation. CC companies stop the card immediately and replace them overnight if requested.
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
ShokWaveRider is offline   Reply With Quote
Old 09-12-2021, 09:31 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 12,872
Quote:
Originally Posted by daverph View Post
My wife is stuck on using debit as she is afraid we will not have the money to pay when the bill comes. I think it’s more psychological than anything. Hope this makes sense.
You wife has a valid concern. You are a lucky person to have a money cautious spouse.

I had the same concern myself in the leaner days. I used my bank's online bill pay feature to solve the problem. I would let a few days or as much as a week of CC statements accumulate. Then I added them up and pre-paid the amount by using the bank's bill pay feature to send the total amount I had charged for that week to the credit card company. If a charge was particularly large - say a big auto repair bill, I did not wait for others to accumulate, I sent the money to the bank immediately.

When the bill arrives it shows all my charges and all my payments. The final payment was usually very low.

Some self control is still needed, of course. If one lacks that, it might be good to ask the bank for a lower limit on the CC. Or just freeze the CC's in a block of ice and thaw them only for emergencies. But, that is for another thread.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 09-12-2021, 09:37 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Jul 2007
Location: St. Louis
Posts: 1,422
Get a credit card
Put it on auto pay
I only use one to make it easy but have two credit cards.
FANOFJESUS is offline   Reply With Quote
Old 09-12-2021, 09:40 AM   #13
Thinks s/he gets paid by the post
 
Join Date: Jul 2007
Location: St. Louis
Posts: 1,422
Quote:
Originally Posted by daverph View Post
I guess I was thinking more along the lines of should we keep X amount extra in checking or anything along those lines. My wife is stuck on using debit as she is afraid we will not have the money to pay when the bill comes. I think it’s more psychological than anything. Hope this makes sense.
I keep about 5x of what I spend a month on the credit card in the checking account. So no problem paying the bill. I don't like cutting things to close. If you only use one credit card it is easy to get a feel of your monthly spending.
FANOFJESUS is offline   Reply With Quote
Old 09-12-2021, 09:50 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 10,500
Quote:
Originally Posted by daverph View Post
I guess I was thinking more along the lines of should we keep X amount extra in checking or anything along those lines. My wife is stuck on using debit as she is afraid we will not have the money to pay when the bill comes. I think itís more psychological than anything. Hope this makes sense.
I have my CCs set to autopay the monthly balance so I never get charged interest. I do keep plenty of cash in checking to cover the autopays and we have an attached $10K line of credit that engages tp prevent accidental overdrafts. As a result, I haven't paid any CC interest and haven't bounced a check in decades.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 09-12-2021, 10:13 AM   #15
Thinks s/he gets paid by the post
 
Join Date: Jan 2011
Location: Fair Lawn
Posts: 2,315
Quote:
Originally Posted by daverph View Post
I guess I was thinking more along the lines of should we keep X amount extra in checking or anything along those lines. My wife is stuck on using debit as she is afraid we will not have the money to pay when the bill comes. I think itís more psychological than anything. Hope this makes sense.
Here's a perfect solution: 1) Get a credit card that offers rebates. 2) Make sure to set up online login for the card, including link to your checking account. 3) Start using the credit card. Every few days, go online and pay off the current balance.
There is absolutely no requirement to wait until end of the monthly billing cycle, so you can make as many interim payments as you wish to. This can resolve your wife's concern.
BTW, as one example Chase Freedom card pays 3% rebate for restaurants and drug store purchases, 1.5% for all other purchases. So you'll get money back (as a statement credit, I believe) for an extra bonus.
mystang52 is offline   Reply With Quote
Old 09-12-2021, 10:28 AM   #16
gone traveling
 
Join Date: Oct 2007
Location: Willamette Valley, Oregon
Posts: 1,979
Just do it.

Cut up the debit cards to prevent any relapse.
RetireeRobert is offline   Reply With Quote
Old 09-12-2021, 10:36 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2009
Posts: 6,018
While I am not as fervent at using credit cards as others here, I have, in the last 7 years been using my credit card more often than before that time. Two things happened at that time to encourage me to use my CC. The first was getting a cash-back card with my main bank (the one I have my checking account with), replacing the useless "points" card I had with a different bank. The second was, coincidentally, signing up for online banking. This made making the monthly payment really, really easy, just a few point-and-clicks.

But it wasn't like I was using my debit card regularly before that. It was mostly cash for the smaller, more routine in-person transactions, and a personal check for many others. Those 2 types of transactions have mostly disappeared in the last 7 years.

I have always paid my monthly CC bills in full, so no interest or late charges; now they are easier to make, and I get the cash back albeit a small one.

I won't use my CC for a bill that has a service charge with it. Most of my monthly bills I use my bank's autopay or use ACH with the vendor (i.e. electric, internet/cableTV/phone). Whichever method of payment is easy and cost-free I will use.

I also take advantage of the CC's billing cycle to stretch out actual payment for some of the larger, lumpier expenses such as the semi-annual car insurance. This can often give me an extra month to accumulate and carry forward the needed surplus in my checking account when the credit card bill is due, even if it is a month later than when the actual car insurance bill was due.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is online now   Reply With Quote
Old 09-12-2021, 10:43 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 15,705
I got a number of CCs... Discover for 5% off on certain categories each quarter, same with Chase... Sams club has various cash back all year... and finally recently went to Fidelity for the 2% over the Capital One 1.5%...


I have to be making over $1,000 per year on cash back... there is no reason to throw away good money..


As to not using a debit card.... well, you cannot if you do not have one!!! I refuse to have a debit card... they have tried over the years to give me one but I always make them give me a regular ATM card...


Debit cards are the devil... you have little to none legal protections that CCs carry... I do not know why your wife does not worry about your account being drained by someone that gets your debit card info... that is out of your hands... paying the bill is not...
Texas Proud is offline   Reply With Quote
Old 09-12-2021, 10:46 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 12,317
Being organized makes it easier for me.

I keep around $8K in my checking account, so I only have to look at it now and then and know it has enough to pay all credit cards.

I also pay all my credit cards from my bank account. You will notice whenever you log into a credit card account , you can pay it there, but instead I pay from the bank.
That way when I log into the bank, I can see which ones I paid recently as they are all there.

To Ease your wife's concerns, limit yourselves to 2 credit cards for now. As spending on 8 credit cards does become a chore to manage (I've done it).

Also log into each credit card account every 2 weeks to look at the spending.
You can catch crazy spending before it becomes a problem. If some CC account is over $X dollars (say $500) , pay it that day from the bank.

Leave the debit card at home.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Old 09-12-2021, 10:49 AM   #20
gone traveling
 
Join Date: Oct 2007
Location: Willamette Valley, Oregon
Posts: 1,979
Quote:
Originally Posted by scrabbler1 View Post
I also take advantage of the CC's billing cycle to stretch out actual payment for some of the larger, lumpier expenses such as the semi-annual car insurance. This can often give me an extra month to accumulate and carry forward the needed surplus in my checking account when the credit card bill is due, even if it is a month later than when the actual car insurance bill was due.
Very good point. I do the same thing. In fact, I time my insurance payments by credit card to just "after" the CC billing cycle has ended just so I get an extra month to actually pay that bill out of my checking.
RetireeRobert is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Using ATMs and Credit Cards in Thailand explanade Travel Information 38 02-08-2020 11:18 AM
Poll:Using credit cards for monthly spending fireorbust Life after FIRE 136 10-10-2019 07:56 PM
Do credit unions cancel credit cards because of inactivity? FANOFJESUS FIRE and Money 11 12-22-2008 05:21 PM
How to switch gears to spending Mudd Life after FIRE 12 04-17-2007 03:40 AM
Credit Cards and Credit Matuski Other topics 21 08-14-2006 12:40 PM

» Quick Links

 
All times are GMT -6. The time now is 02:27 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.