Poll:Using credit cards for monthly spending

[sengsational]

Ko'olau, The solution might be to get MORE cards! A goodly fraction of your credit score comes from the fraction of available credit in use. So if you have 25K available and spend 8K on airlines, you're at 34%. If you got another 25K CC, your utilization would be half of that. But as you said, over 800 and not going for loans, no need to sweat the score.

 

[Koolau]

Ko'olau, The solution might be to get MORE cards! A goodly fraction of your credit score comes from the fraction of available credit in use. So if you have 25K available and spend 8K on airlines, you're at 34%. If you got another 25K CC, your utilization would be half of that. But as you said, over 800 and not going for loans, no need to sweat the score.

We looked into that - just because - not because we were actually concerned. Opening new credit usually gives you a relatively short term hit in credit score is what we were told. In short, we didn't do anything different and score is about the same as almost 10 years later.

 

[Senator]

If you have a 2% rewards card, you can pay Fed taxes w/ a fee of 1.87% at pay1040.com so there some positive differential. In addition, you can get 3-6 wks more of interest since payment for credit cards is delayed compared to a check.

That is exactly what I do. It's not a lot of cash back, but the net is positive. It actually costs less than 1.87%, as the fee is charged too, at no extra cost.

It all adds up.

 

[harley]

We had a similar problem. I recently applied for a HELOC, and was denied due to too high a balance/credit limit ratio. We sometimes purchase 10s of thousands of dollars per month with our business. It all gets paid end of month (or sooner), but depending on when they take the snapshot it can look pretty bad. I'm going to make sure that when I apply for my bridge loan that everything has been close to zero for a month.

We each have 810+ credit scores, but that doesn't seem to matter. We have a decent amount of income, between rental properties and our small business. We have plenty of money, although I'd take a significant tax hit if I had to pull out a large chunk at once. But the banks/lenders have a formula, and if you don't fit in it you're pretty much hosed.

 

[GravitySucks]

Voted use for everything but in reality my barber and barkeeper dont accept credit cards so...

 

[thepalmersinking]

If you pay the card off every month it's the same as paying as you go. It's just consolidated. If you find yourself overspending, stop. But the secret to success is never incur a fee. Let the foolish majority pay for your cashback.

Actually, it’s not the foolish majority paying you, it’s the merchants where you spent the money paying you. It’s called interchange expense.

 

[COcheesehead]

Actually, it’s not the foolish majority paying you, it’s the merchants where you spent the money paying you. It’s called interchange expense.

+1. This is correct and a smart merchant adds in a little extra to cover this expense, so in the end we are paying for it.
In my state it’s illegal to add a fee for credit card use, but if it’s in the margin already....

 

[kcowan]

and in countries where it is illegal to price fix, merchants charge extra for credit transactions. Costco in Mexico charges 3%.

 

[sengsational]

+1. This is correct and a smart merchant adds in a little extra to cover this expense, so in the end we are paying for it.
In my state it’s illegal to add a fee for credit card use, but if it’s in the margin already....

True, "we" are paying for it, but it's lumpy. In total, the sum adds to the fees charged by the credit cards. Individually, some people pay little (those who milk the card perks and pay off monthly), and others who pay a lot (don't get points and perks and pay big interest amounts).

 

[jazz4cash]

Voted use for everything but in reality my barber and barkeeper dont accept credit cards so...

Me too, but I forgot to get cash from the ATM one time and found out my barber does accept credit cards using the Square processor. I gave him a bigger tip to offset his expense. The next time I went to him he pulled out the CC scanner without even asking and suggested adding the normal tip. It seemed that he preferred this payment method to cash which was a bit of a surprise to me. I'm going to ask him about it next time.

I don't have a personal barkeeper.

 

[steelyman]

I’ve been a Discover cardholder for a long time and sign up for each quarterly 5% cashback reward.

Recently (due to threads like this) I’ve taken a closer look at the cashback offers from other cards I have and adjusted card use accordingly.

This quarter (Q3 2019) the Discover program has applied to restaurants and PayPal and I’ve made sure to take advantage of the restaurant part.

Next up is Amazon, Target and Walmart. I took a closer look at the program terms and it appears to me that in-store Walmart purchases are excluded from the offer (I guess they’re promoting online shopping).

 

[fireorbust]

I started this thread a couple of months ago. Since then, we've been using our Cap One card for all of our spending. We even got an Amazon card. Our spending habits are probably better. DW was getting cash back at the register using our debit card for extra spending money. That is hard to quantify when you try to track spending habits.

We pay off the card each month based on the balance at month end. The statement might show we only owe $800, but we pay the full balance of $5000+ or a little extra.

The 2% cash back helps increase our total return for the year. If we are going to spend it, might as well get 2% back.

I signed up for Hotels.com and was promised a 10x points bonus on our Cap One card. Still looking for about 10000 points. Not real happy about that. Anyone else have issues?

Thanks for everyone who posted on this thread.