Credit Crad Strategy

My wife and I charge every expense we can in order to get 1% back on all purchases and 5% on gas purchases. Each month we pay it off completely. We have another card that is at 0% on balance transfers and purchases. With this card we have allowed the balance to float, but at the end of this month it is due because it will switch from 0% to 14%. Therefore, it will be paid off before the end of March.

What do you all do with credit cards?

Nagel
http://finance.webaplex.com

Same here, except that our credit cards carry Hilton and Marriott points. Next month we'll be in Brussels for 7 nights. Three will be in the Marriott on the Grand' Place, 3 will be in another one (requiring fewer points) and one will be in Bruges, a wonderful city north of Brussels. Our total hotel bill will be $250 for the night in Bruges.

We've also got a credit card that gives us 1% back against our mortgage (Wells Fargo), but our mortgage interest rate is so low (4.625% fixed) that I'm not in a big hurry to pay it off.

Put them in the spokes of my bicycle wheels like when I was a young lad. Or at least, I should have.

I tried to do the very same thing (earn reward points), but my propensity to save sometimes clouds my judgment ("I have $1000 extra in savings, why would I want to blow some of that on what I owe on my credit cards when I can buy an index fund?"). It got pretty bad. Before I knew it, I went from never having a credit card balance to having a third of a car note's worth. All for $50 cash back. Definitely not worth it. Luckily, this is on a 0% rate which ends soon, so I am now paying off my debt at a very accelerated rate (but not as high as I could). I do not like having a large debt over my head.

I did use one of my Chase cards to transfer my wife's car loan. 4.99% fixed and a $75 one-time fee versus Mazda's "special" at 10.40%.

We use two cash back cards - Amex Blue cash (5% on gas etc, 1.5% on everything else) and the Pentagon Federal Credit Union 1.25% flat cards for all expenses, including utility bills. The only big ticket item that we don't put on it is our mortgage payment.

Additionally, I have or have had Amex Hilton, Chase United Airlines, Citibank American Airlines and the Amex Delta affinity cards. I get them for the initial 20k miles/points, and cancel them at the end of the first year, when the annual fee threatens to kick in.

I have been tracking my FICO scores monthly since I started this "milking" practice a few years ago, and couldn't notice any significant drop associated with opening a new card or closing a card acct.....