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Credit Cards and The Fastlane

A detailed account of a Fastlane process...
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DeletedUser394

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There was a recent thread built on the topic of starting to build credit.

Well, I'm beyond that point, as are many others here, so I'm wondering how fastlaners use credit.

How many cards, do you prefer paying cash or prefer to accrue points, etc.

Right now I have 5 personal cards, no business cards. No debt. 3 of the cards I have an interest in keeping, but 2 of the cards have such low limits that I'm thinking of just shutting the accounts. The highest limit card is 75x the lowest limit card.

The only thing keeping me from doing so is that the marketing has gotten to me. Meaning it's 'cool' to collect plastic LOL. I mean, when I reach Centurion/Black status, all the other cards can go away, but until then..

The lower limit cards are store cards with no fees but egregious interest rates. No debt, so interest rates are irrelevant to me at this point.

Just curious what your credit habits are like.
 
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Ninjakid

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Wow, five credit cards. I feel like maybe there's something I'm supposed to do but didn't, because I only have one credit card.

I rarely ever use cash, and I only carry like $40 on me at a time at the most. Not really any particular reason, I just like not having to carry wads of paper with me.

But yeah, I pay pretty much everything on credit, and then just pay it off right from my bank account.

I never spend more then the amount of money I actually have, or even close to. This is a very very very solid Adolf Hitler-esque rule I have.
 

The Grind

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Do not close your credit card accounts for any reason, it impacts your credit negatively.
 

Glorydog

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Wonder if this is regarding the thread I started a few weeks back? It was pretty insightful to me. Curious to see how many people here actually use credit as well.
 
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DeletedUser394

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Wonder if this is regarding the thread I started a few weeks back? It was pretty insightful to me. Curious to see how many people here actually use credit as well.

Well this thread isn't a continuation of that, I only mentioned it to prove that I used the search function before posting.
 
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FreshStart87

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you obviously missed this part of the paragraph in your own source. Ramit Sethi explains this well in I will teach you to be rich.

First of all, those credit accounts are contributing to the amount of credit you have available. Because your credit utilization and available credit matters to your credit score, you want to show that you aren’t using up as much of credit as you could be. Once you close those unused accounts, you suddenly have less credit available. And, if you occasionally carry a balance on your other cards, your credit utilization has increased.
 

The Grind

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you obviously missed this part of the paragraph in your own source. Ramit Sethi explains this well in I will teach you to be rich.

First of all, those credit accounts are contributing to the amount of credit you have available. Because your credit utilization and available credit matters to your credit score, you want to show that you aren’t using up as much of credit as you could be. Once you close those unused accounts, you suddenly have less credit available. And, if you occasionally carry a balance on your other cards, your credit utilization has increased.

lol
 
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MJ DeMarco

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I don't use cash for anything, but I pay cash for everything if that makes sense.

My wallet at any given time has about fifty bucks in it.

Everything I spend goes on my Chase Sapphire (personal) or my Amex (business).

Then I pay those off every month. I NEVER CARRY A BALANCE.

I do this to collect points.

Every year I spend my points and get a ton of free stuff. And because I don't pay finance charges or annual fees, it's really free.
 

FreshStart87

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I don't use cash for anything, but I pay cash for everything if that makes sense.

My wallet at any given time has about fifty bucks in it.

Everything I spend goes on my Chase Sapphire (personal) or my Amex (business).

Then I pay those off every month. I NEVER CARRY A BALANCE.

I do this to collect points.

Every year I spend my points and get a ton of free stuff. And because I don't pay finance charges or annual fees, it's really free.
That is also a discipline, that many cannot do. The basics must be met first, emergency fund, zero debt and just spending based mainly on necessities and not wants.
 

Even Steven

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I don't use cash for anything, but I pay cash for everything if that makes sense.

My wallet at any given time has about fifty bucks in it.

Everything I spend goes on my Chase Sapphire (personal) or my Amex (business).

Then I pay those off every month. I NEVER CARRY A BALANCE.

I do this to collect points.

Every year I spend my points and get a ton of free stuff. And because I don't pay finance charges or annual fees, it's really free.

This is what we do.

I have 2 credit cards. One is the very first one I opened about 15 years ago when I was in college. I keep it mainly because I'm under the impression that more mature credit accounts look good to the credit bureaus.

My main card is an airline miles card. That's the one we use for everything. We pay it off every month and collect the points. In about 3 years, we had enough points for our family of 4 to fly to Japan for free to see my wife's family.

I also got the credit limits on each of those raised as high as I could to reduce my overall utilization even more.
 
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TTG SS

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I use my CC for nearly all of my transactions. I pay it off whenever I want, because I don't need to use it, but like to. I don't like carrying a lot of cash, and I don't like getting change(coins). Like MJ said, I don't pay cash, but I do.

I basically use it like a debit card, and still get to build some credit while using it.
 
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DeletedUser394

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Thanks for sharing everyone!

Guess I'm crazy with the 5 cards haha.
 

jon.a

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2 25K VISA's paid off every month.
We use them for most of our spending, including business. I like points :)
 
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1step

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If either card is your oldest card I think you should leave it open. Closing old accounts will negatively affect your score
 

Coalission

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I don't see why anyone would use cash over credit if you have the choice. Not just points/cash back, but purchase protection, automatic record of every transaction, and most importantly floating someone else's cash for 25-30 days and sometimes even 60 days with no interest (thank you Amex Plum). Everyone from the government to corporations would probably take an interest-free loan if they can get it (the government gets a huge one all year), but average Joe has been conditioned to see these little short-term interest free loans as "bad".

As long as you can afford it, keep the cash on your side as long as you can without interest, and if you have to pay a little interest once in a blue to scale your business or for an investment opportunity, so be it.
 

Phones

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Credit cards are great when you're tight on cashflow and you know you either will 1.get paid somewhere between now and the due date on the credit card or 2.Will get back what you're paying

Example of 1. I had around 8k "stuck" in my payment processor and needed to make a payment to my supplier, credit card , check.

example of 2. I'm expecting a 10k$ import real soon, I will have to pay VAT upfront only to deduct it later. As I'm tight on cash, this would keep me from making further investments, thus paying this with a credit card makes perfect sense.

I currently have one credit card at 2k € / limit and getting a second one soon.

Too bad rewards/points system here in Portugal is useless, you need to spend 100k€ to get a 100€ flight.
 
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Ramble On

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I have a business rewards card that we use for everything in the business. We use it to purchase inventory, supplies, etc. It racks up a LOT of points every year that we can use for goodies. I don't carry a balance and pay if off every month.
 

eliquid

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Im in the same boat as a few others.

I have several credit cards, but only because I won't cancel them which can negatively ding my credit score from when I was younger.

I have some rewards cards ( Amex, Sapphire, Ink, and a few others ) recently I put all my spend on now and use the miles/points for perks. Its amazing to secure a flight and hotel/AirBnb for free this way.

I use to just cash out for HomeDepot cards when I was updating my house/appliances. However, having a huge box of $50 gift cards gets old trying to spend them at the store and the cashier looks at you like your some criminal when cashing in 100 of them at a time.
 

Ron Dee

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Using my credit cards like a debit card, paying off in full every month, like others mentioned. Currently I am building up a few hundred dollars in points to a retail store. I would prefer cash over this and don't need airline miles at this time. Is a cash back card really just getting cash back? If so any card recommendations?
 
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biophase

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business capital one spark visa 2% cashback on all purchases
 

Darius

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I have about 7-8 personal cards. I went card crazy and just applied for everything a few years back lol. I buy everything with cards and then transfer the money over.

Usually $0-$30 cash in my wallet.
 
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twdavis

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I really want an Amex but I'm still rebuilding my credit after I completely went berzerk when I was about 3 years younger and ran everything over so Chase closed my Freedom account. :( It's paid off but I still have trouble getting unsecured cards.



Ohhhh what wisdom does....
 
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Pilatus

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I have one MasterCard I use to collect Emirates miles which I then spend to purchase other flights to visit family back home. I use it like my savings card. I never carry balance on it, always pay it every week. Every year I make a phone call and the bank accepts to waive the annual fee so I'll keep it until they decide to charge me.

I often have no cash in my wallet.
 

WestCoast

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I have 11 or 12 credit cards. One personal, the rest for the biz.
In prime season, we probably spend $150-200k a month on them simply for me to get points.

The banks freak out when they run a credit report, as they see all these open balances....
But, then you send them statements back to the start of the card. When you show you pay off your $100k/month credit card each month in full, they get it.

It improves cashflow, build personal credit (assuming you use them wisely).
But you also get hit pretty hard at first as it lowers your age of credit, increases your utilization initially, and adds a lot of hard inquires to your account.

I suggest everyone who wants to watch their credit use Credit Karma (I have heard Credit Sesame is good too).
You have to be on this stuff, understand what it impacts as far as what the bank thinks.

We ALL think we are a good credit risk. But the bank looks at things very differently.
Good credit is not the ONLY thing they consider... but if you walk into a bank and ask for $1M Credit Line with 650 credit, you will probably be shown the door.

If you have 780+ credit, they will want to talk.

--
Credit cards are good when paid in full monthly, used to establish a lengthy and complete credit history, and maybe get you some freebies on the side.
Free travel is nice, but, I consider that a perk, not the main reason, to have a lot of credit cards in use.
 

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