HOW DO YOU KNOW IF YOU HAVE TOO MANY CREDIT CARDS?
How many are too many? Is there a set rule or a prescribed limit? Apparently not from what I have read. But what I have found is that when I have to spend hours almost daily to monitor them, it is too many for me.
How many Credit Cards Should You Carry? from moneyunder30.com
HOW DID I END UP WITH SO MANY CREDIT CARDS?
When I discovered that cash reward credit cards could be a reliable way to reduce my monthly expenses, I started applying for them as often as I could. Of course, the idea was to get the largest promotional welcome bonus, the highest % of cash rewards as well as a substantial amount of available credit. Therefore for about the last three years, gathering cash reward credit cards has become a major pastime. Well, guess what? Now I have too many cards.
From creditcard.com, One Credit Card or Many? How to Decide?
THE JOURNEY TO TOO MUCH
It has been a tremendously educational experience collecting all the cards I have. Primarily, it has helped and still helps to reduce my expenses. In addition, I have written many blog posts and several Ebooks about this. Doubtless, there will be more. But the most significant comment I can make at this time is that right now I have too many. As I mentioned in a previous blog post, I have reached critical mass.
There are Six Primary Credit Card factors in the major FICO® scoring system as illustrated by Credit Karma®
For most of this time, my primary concern has been focusing on the 5 or 6 FICO® credit score factors that go into building a good credit score. Certain cards have taken priority for charging purchases. Then it recently occurred to me that if I did not start using all of my cards, some could be closed for inactivity. That could affect my credit score negatively by lowering my available credit, changing the average length of time I have had cards and flagging too many closures. Low and behold, that is exactly what happened this week. One of my co-branded cards was closed without notice for inactivity.
Credit Monitoring Alert from CreditSesame.com
HOW MANY CARDS DO I NEED?
I need enough cards to satisfy the FICO® score factors. Fortunately, I found a formula that I could use to determine how many cards to own, which ones to keep and those to phase out since I had surpassed critical mass. These are the factors I now consider in which cards to use:
a. the oldest aged accounts
b. those with the best credit line and lowest credit utilization ratio
c. the ones with optimal returns in my top spending categories
d. those that give me the maximum value for use with my favorite merchants, stores, airlines or hotels
Optimize the Credit Cards You Carry with A ‘ Straight Flush’
HOW MANY CARDS DO I WANT?
My sense is that I would like to have no more than ten at the most. For example, my ‘straight flush’ analogy illustrates most of them. Beyond that, I think that one or two travel cards are essential. Other than that, an additional card or two in the ‘straight flush’ formula would be OK too.
My FICO® score in September 2019 according to CreditJourney
CONCLUSION
I am at a new beginning. I have climbed the credit card mountain in excellent standing. Now it is time to descend the other side with equal care. Therefore future writings on this topic will involve reducing my load doing my best to maintain my great credit card standing while keeping also 6 FICO® score factors in balance.
There are 5 Credit Card Types, image from Mortgagefit.comAccording to Mortgagefit.com administrator’s blog, there are 5 credit card types. The image to the left illustrates them. They include:
5. co-branded credit
4. store credit
3. charge credit
2. general credit
1. secured credit
In addition, the following describes what they are. This is also according to their blog administrator. Keep in mind that the blog post is from 2011.
There are five types of credit cards according to Mortgagefit.com
5 TYPES OF CREDIT CARDS REDUCED TO THEIR ESSENTIAL 2 PLUS
In my opinion, the administrator’s blog post uses generic definitions. By today’s standards, they are not technical or simple. In addition, the post is dated. As a result, it is not exactly accurate by today’s standards. Therefore, I have attempted to clarify the types of credit cards that exist. In my blog post series written about credit cards, these are the types of credit cards:
1. network
2. co-branded
3. secured and unsecured
In my blog post, Different Types of Credit Cards And Their Best Uses, Part One – July 2019, network and co-branded are explained. Part Two in that series reviews network and co-branded cards as well as explores secure versus unsecured cards. To compare accurately, I want to explain each type individually, mine versus the Mortgagefit.com definitions.
#5.Co-branded
There is some agreement of terms between mine and Mortgagefit.com. #5.co-branded: #Co-branded credit cards: These cards are the same as general credit cards. But these cards have a “special relationship” with a particular organization or retailer. So, if you purchase goods/items from those particular organization or retailers, then you will be able to extra rewards and benefits. However, these cards can be used in other stores as well. A good example of such a card is Amazon.com credit card.”
#1.Secured Cards
“People who have a bad credit history or no credit history at all can take help of these secured cards. These secured cards are similar to that of general credit cards. However, in case of these cards, you must make a fully refundable deposit, either by cash or by sending a check. This deposited amount is considered as your credit line. As a result of this deposit, all the secured cards offer guaranteed approval.” This standard seems to work about the same today. So this card’s name and description are still solid. Here’s one card in both blog post comparisons.
But I find #4.store credit, #3.charge credit, and #2.general credit somewhat confusing. Therefore, I wish to simplify them to be more accurate by today’s standards. Otherwise, they should be eliminated.
#4.store credit, #3.charge credit, and #2.general credit
“General Credit Cards: A very common type of credit card is the general credit cards. Such credit cards don’t require any kind of security deposit and can be used in most stores/shopping malls or to make any kind of purchases.” This seems to describe both network and co-branded cards.
#Charge Cards: These cards are very similar to general credit cards. However, the major difference lies in that fact that unlike general credit cards, you will have to pay your total balance in full every month.” What does this remind you of by today’s standards? The only one, in my opinion, is what is called a store credit card. I find them to be minor players in the credit card count either way. I still find them confusing.
#Store Cards: These cards are similar to that of credit cards. However, these cards can only be used to buy goods at the store that has given you the card. Macy’s Credit Card is a good example of a store card.” These sound like store cards that are not backed by any banks. Therefore, I would combine charge cards and store cards into one kind of credit card. That reduces the number to four kinds of kinds from 5. In addition, I am still confused by charge cards today. I have about five of them. The only reason I got them is for the 5% discount when I charge merchandise in their stores.
CONCLUSION: A FINAL TALLY
What then is really the number of types of credit cards? Let’s look at each category.
1. Secured cards are definitely relevant today especially with people starting out to establish credit. But since they are offered by large banks, and can be upgraded, I do not give them their own category. Total of 0.
2. Somewhere in-store card, charge card, and a general credit card are what we call, the network and co-branding cards. They are unsecured cards and do not need their own category. Total of 2.
3. Charge cards are fazing out overshadowed by the above cards. In my opinion, they rate a total of 0.
WHAT DO YOU THINK? Please go to the comment box and share your thoughts with the world
COMMENTS AND QUESTIONS
This is only a SAMPLE of the comment box that can be found and filled in at the bottom of this page as well as each blog post page.
Readers are welcome to comment on this blog post by scrolling down to the VERY bottom of the page. That is where you will find the comment form where the words ‘start the discussion’ are. Questions are also welcome. But it is best to contact me for Q&A on The Credit Card Maven Facebook Page.
There are two overall credit card types, network, and cobranded retail store cards. Within these types, there are four network types of cards AMEX, Discover, VISA, and MASTERCARD as well as hundreds of cobranded retail store cards.
This can lead to a great deal of confusion in choosing what to apply for and obtain. Therefore, the goal of this post is to untangle the confusion by identifying the types, networks as well as cobranded ones that exist to distinguish and choose between them. This way, one will have the advantage of applying for and using the best cards while avoiding problematic or less valuable ones.
ADDITIONAL INFORMATION
Besides this post’s specific information, one can find the recently published blog post series on ‘A Credit Card Rating System’. For additional reading, it is filled with information about my helpful Credit Card Rating System in a five-part series.
The traffic signal is the primary visual for this blog series. This image is from Pixabay.
To begin with, there are four networks or ‘major’ Credit Cards. In fact, they are the pillars of the credit card world. Specifically, the first two listed have no bank affiliations. Within them, Discover has the most international acceptance. Then the second two partner with large banks. These cards networks are:
1. AMERICAN EXPRESS (AMEX)
2. DISCOVER
3. MASTERCARD
4. VISA
There are four major credit card types or networks: American Express, Discover Cards, VISA, and MasterCard. Image from Cardrates.com
SECOND TYPE: CO-BRANDED STORE CREDIT CARDS
Store Credit Cards image from rewardscreditcards.orgNext are the store credit cards. There is a significant difference between them and the major network credit cards category. That is their tendency to be backed by smaller banks and their primary function which is to provide no-interest payment plans for making large purchases (hundreds to thousands of dollars) at major retail stores.
EXPLANATION OF CO-BRANDED CARDS
Here’s an explanation of why cobranded cards are so valuable to have as part of the ideal mix of the two major types of credit cards.
The Benefits of Co-Branded Cards in Your Pocket from an unknown source
BEST STORE CREDIT CARDS
What banks do these cards cobrand with? Let’s take a look. This section actually has a list of of some of them as well as the bank affiliations they have. Best Store Credit Cards according to WalletHub.com
Best Retail Store Credit Cards and the banks that cobrand them. Enlargment of above image
BANKS THAT COBRAND THE BEST STORE CREDIT CARDS
According to WalletHub.com, this is a list of the banks that cobrand the best store credit cards. Amazon.com Store Card-Synchrony Bank
Costco Anywhere-Citibank
Target-TD Bank
TJX Store Card-Synchrony Bank
Kohl’s Credit Card-Capital One
Fingerhut Credit Account-WebBank
MORE ABOUT THE BANKS THAT COBRAND STORE CREDIT CARDS
Many stores are cobranded by Synchrony Bank to offer a huge variety of choices
Synchrony Bank
Synchrony Bank specializes in cobranded credit cards. Offering cards that are tailored to particular customers, they have credit cards for store brands, gas stations and more.
“Most are offered with no annual fee and some have excellent rewards available. Synchrony Bank credit cards can be a good choice if you’d like to earn and redeem rewards with a particular brand.” From Synchrony Cards report by US News
Although the following also cobranded with the top retail banks, they will not be gone into in detail at this point. With one exception, Comenity bank which cobrands with 91 retailers will be explored in detail after the list of the other four top cobranding banks. Citibank TD Bank Capital One WebBank
Comenity Bank
91 Comenity Bank partners with retail credit cards from UpgradedPoints.comComenity Bank cobrands with many store credit cards with fleible benefits, quote from upgradedpoints.com
WHAT’S NEXT IN PART TWO
The following issues will be explored in Part Two of this topic, Different Types of Credit Cards And Their Best Uses. Why get network cards? Why get store brand cards? Secured versus unsecured credit cards.
COMMENTS AND QUESTIONS
This is only a SAMPLE of the comment box that can be found and filled in at the bottom of this page as well as each blog post page.
Readers are welcome to comment on this blog post by scrolling down to the VERY bottom of the page. That is where you will find the comment form where the words ‘start the discussion’ are. Questions are also welcome. But it is best to contact me for Q&A on The Credit Card Maven Facebook Page.
Although this final post in the five-part series is about risky cash reward cards and their qualities, I would first like to review the rating system itself. Then this post will get into the details of risky cash reward credit cards and qualities.
CASH REWARD CREDIT CARD RATINGS REVIEW
As explored in earlier posts in this series, I have created a rating system for Cash Reward Credit Cards. It is similar to how traffic signals operate. This image is from Pixabay.
To make the most of cash reward credit cards, it is important to know about the qualities of any cash reward credit card before obtaining or using it. This is because not all cash reward credit cards have the same qualities. Therefore, when you know the qualities, you know how to plan for the most benefits from it and how to avoid the least of them. Let me explain how this works by reviewing the traffic signal system I developed.
THE TRAFFIC SIGNAL SYSTEM FOR CASH REWARD CREDIT CARDS AND QUALITIES
Cash Reward credit cards can be divided into three quality categories similar to a traffic signal: GREEN LIGHT credit card cash reward cards are detailed in the blog post Cash Reward Credit Cards Considerations (June 2019). YELLOW LIGHT cash reward cards are detailed in the blog post, Cash Reward Credit Card Cautions (June 2019). RED LIGHT cash reward cards and qualities are detailed in this blog post. It is about qualities to avoid or even cards with severe drawbacks. If possible, avoid the card limitations but not the card completely if it has redeeming qualities. As the saying goes, ‘don’t throw the baby out with the bathwater’. Sometimes, I find this does apply to cards that have qualities in the RED LIGHT quality category. Thus, here are some situations where this has proven to be the case.
RISKY RATED: PROCEED WITH GREAT CAUTION OR NOT AT ALL
The red ‘Warning’ traffic signal light from Pixaday images.
This post, Part Five of The Credit Card Rating System reveals risky cash reward cards that can present some rather challenging situations. In such cases, I would either pass or proceed with great caution. Anyway, there are several reasons people do acquire such cards:
1. less than stellar credit score which makes better quality cards unavailable
2. lack of knowledge about better quality cards
3. need for any financial benefit at the given time
USE ONLY WITH THE GUIDANCE OF A RELIABLE RATING SYSTEM
As mentioned in Part 4, there are many cash rewards credit cards that require caution when using because of the mixed qualities they possess. I also mentioned that in order to manage all types of cards, I had to set up a system for rating cash reward credit cards.
MY SYSTEM
My system helps determine what degree of cautious awareness is required to use such a card and/or qualities safely. Along these lines, I have reserved this post about risky cash reward cards to focus on what card(s) comprise the riskiest qualities to use. In other words, this post is about the ‘Red Light’ Cash Reward Credit Cards qualities and cards that possess them. These can be the least desirable cards to have.
RED LIGHT CREDIT CARD CASH REWARD CHARACTERISTICS TO AVOID
The red ‘STOP’ light traffic signal light from Pixaday images.
The following information is based upon my own experience and is not necessarily documented research facts. Where it is a fact, a source will be sited.
The CARECREDIT® REWARDS MASTERCARD
For instance, the new CareCredit® Rewards MasterCard has some unusual perks. There are categories in which one can receive 2% cash back. They include medical practitioner charges, drug store charges, and some other unique categories for this rate. But there is a serious limitation in cash reward delivery.
LONG DELAY TO RECEIVE CASH REWARDS
This illustration of a long delay to receive a cash reward is a story about The Care Credit Rewards Card. Promotional signup bonus availability does take the amount of time clearly stated in the application, after 90 days.
On the other hand, cash rewards for the most desirable credit cards take simply a matter of days. Here’s where you can get stopped by a red light. It is also where you may have to weigh whether or not the positive considerations outweigh the qualities to avoid.
When you call, you have to:
1. be specific about asking for the redemption of your cash rewards, in increments of $10
2. verify your information with the customer service representative
3. clearly state, ‘I want to redeem my cash rewards, now’
4. find out when you can expect your cash reward
5. write down every detail each time a call is placed to them about this
The immediate result is the following. It takes one to two billing cycles after calling to request your cash rewards. The number of months delay depends upon what date in relation to the statement date the request is made. Now, are you totally confused as well? I was.
LONG WAIT FOR PROMOTIONAL SIGNUP BONUS TO BE AVAILABLE
In some cases, I have spent the minimum needed to qualify for a promotional bonus in less than the time provided. Some cards will pay me the bonus early. On the other hand, some won’t. It is clear which is preferable. Find out the quality related to this. It is important to know how long the wait is.
CITIBANK N.A. SPONSORED CARDS
Some of the cash back cards sponsored by Citibank, NA are problematic.In addition to VISA, MASTERCARD, AMEX, and DISCOVER CARD, there is a variety of bank-sponsored credit cards such as Citibank N.A., Synchrony Bank, TD Bank, and Comenity. In my experience, Citibank N.A. cards can be problematic. For example, I constantly have trouble logging into my accounts. These include Staples | More Account, and The Home Depot. In addition, one of my accounts was closed without warning due to lack of use. Most credit card companies will write at least once, if not more to notify a customer about an impending closing. To say the least, this is a nuisance if not a real inconvenience.
OTHER QUALITIES AND CARDS TO AVOID OR USE AT YOUR OWN RISK
The red ‘STOP’ light traffic signal light from Pixaday images.
LOW PROMOTION SIGNUP BONUS
There have been times when I really needed a promotional bonus to help pay some bills even if it was only $100. It is not always possible to get the best card with double that rate. Therefore, compromise comes into the picture. Because it’s been quite a while since I needed to signup for one of these cards, I am not sure which they are. But you will find out when you see their offer.
LONG WAIT FOR PROMOTIONAL SIGNUP BONUS TO BE AVAILABLE
In some cases, I have spent the minimum needed to qualify for a promotional bonus in less than the time provided. Some cards will pay me the bonus early. On the other hand, some won’t. It is clear which is preferable. Find out the quality related to this. It is important to know how long the wait is. As mentioned, CareCard Rewards MC is such a card.
$50 MINIMUM IN CASH REWARDS BEFORE DISTRIBUTION IS AVAILABLE
Barclay Bank MasterCard®. There are so many other cards that offer cashback so much quicker. One really needs to question why to bother with this one. Unless this card is used to charge all one’s expenses, it does not make sense to use it. In addition, 1.5% is not such an attractive rate anyway. In my opinion, this is one of those cards to sign up for when you just really need the $100. promotional signup bonuses.
A Review of The Home Depot Card which offers no cash back
NO CASHBACK OR 1% CASH BACK
There are so many cash reward cards with enticing deals that there should be no reason to acquire a card that offers no cashback or only 1% back. Unless there is a good reason, stick to this. Here’s one exception.
When we went to The Home Depot to make some purchases. We got a $25 promotional signup bonus. That paid for what we bought. But after that, the card has sat gathering dust. We have to make a purchase on it or our credit limit will go up at the beginning of next month. At least they wrote to let us know. On the plus side, there are some good promotions on large purchases and time to pay them off.
UNAFFORDABLE HIGH ANNUAL FEES
Some Chase Cards have very high annual fees. But keep in mind that if you can afford it, the benefits can be commensurate with such a fee. But if money for such a fee is not saved and readily available, it can be a disaster.
The Best Buy Citibank Card was cancelled without warning
CANCELLATION OF CARD WITHOUT WARNING FOR LACK OF USE
We had a Best Buy Credit Card issued by Citibank®. We failed to use it within the given time required. But we received no communication from them notifying us that our card would be closed if we did not use it within the given amount of time. To my knowledge, at least one or more letters are required before an account is closed. Shame on you Citibank.
LIMITED ‘LIVE’ HOURS TO REACH THE BANK
This can often be a problem with store credit cards and smaller bank credit card companies rather than large banks. Their hours of in-person availability tend to coincide with regular business hours, 9am-5pm or maybe 8am-8pm. But they are not 24/7.
CONCLUSION
As you can see, there are not always very clear distinctions when it comes to choosing a cash rewards card. Some things may work in your favor while some may not. In addition, ratings and credit card consideration details can change over time. It is best to check the most recent information posted about each credit card. Don’t be afraid to ask questions. Keep asking questions until you get the right answer. Reread this blog post series as well.
Please note: I am not a certified financial planner or professional advisor. These blog posts about the use of credit cards are based on my own experience which I freely share. But I can take no legal or financial responsibility for the results you may have in attempting to follow my system. But I do wish you the best and welcome your questions on the comments at the very end of this post.
I’ve talked a lot about using cash reward credit cards, lately. It actually feels like I am living in a credit card world. In fact, this for two reasons. One is because I have wanted to learn everything I could about cash reward credit cards, credit scores and credit reports, too. The other reason, probably the most important one, is that cash reward credit cards have become one of my most essential survival tools.
Alison D. Gilbert, The Credit Card Maven
The Credit Card Maven
As a result of my intense interest and need to know everything I can about credit cards, I’ve even created a Facebook page called The Credit Card Maven. This is where I post information as I have researched and sourced it. I have found a number of websites, blog posts, Facebook pages (listed here) and groups that are extremely helpful resources in my quest for knowledge as The Credit Card Maven in my credit card world. Included are:
• Credit Card Mastery
• Credit Karma
• CreditCards.com
• NerdWallet
• Wallet Hacks
• Wise Bread
Viper Tool Storage Box Survival Toolkit as part of My Credit Card World
Credit Cards as a Survival Tool
As I mentioned at the start of this post, credit cards have become a survival tool in my credit cards world. It was not by design that this came to be.
It was more a matter of circumstances. Once I got a feel for how useful and profitable using credit cards could be, my desire to use them and master it increased. Let me give you an example.
I have had cash reward credit cards for a number of years. I can accumulate up to about $40. in a two month period from one of them. That was a good beginning. Then I decided to get a travel rewards card in anticipation of someday going to visit my family in Colorado. I used it and kept on accumulating points.
Credit Card Currency
When I went to check on the conversion to paying for an airplane ticket, the results were not impressive. I had to find something better. This time by design, I set out to find the best deal I could for air travel benefits using a credit card. I found one that I ultimately used for my flight. It rewarded me with 30,000 points and a $100. discount on my airplane ticket. This was such a great deal that I have enough points to return to Colorado for free, right now.
Credit cards currency from 123RF.comNow that’s what I call using credit cards as currency. If I could do that with a travel rewards credit card, I wondered what other benefits and rewards I could manifest in my credit cards world. I familiarized myself with a few other travel rewards cards as part of getting a second ticket for my husband and having funds for other things related to our vacation. All in all, my activities resulted in a savings of between $400 and $500 for our trip.
Credit Card Investing
Let me present one more situation where the skilled use of a credit card became very profitable. I found an offer for a cash rewards credit card that would refund $100 on spending $500 within 90 days of acquiring the card. That would be a 20% profit. I had never accomplished that in the stock market. It seemed like a very good investment to me. I wasn’t sure if I would be granted another card as I had accumulated quite a few by this point. But it came through. I fulfilled the requirements. Now I am just waiting for my investment to pay off.
Credit Card Monthly Rotation represented by a photo from blog.taxact.com
Credit Card Monthly Rotation
I made another discovery. It may seem a bit confusing. In fact, I am kind of surprised that I am even able to do this. I am calling it credit card monthly rotation. It is based upon a combination of the nature of credit cards themselves and good credit card hygiene.
Each credit card has a closing date and a payment due date. Since I have several cash reward credit cards and they have different closing and payment dates, I can stagger them and not have to pay them at the same time. If I make my purchases and schedule my payments using my monthly rotation system, I have a revolving credit situation. In other words, if my budget in a particular month needs to be exceeded, I can use a card that has a closing date that will allow payment the following month. I just have to make sure the funds will be available then. I also have to have a very good bookkeeping system to keep track of every detail of every card.
Brian Cain’s Credit Card Mastery Course
Credit Card Mastery
What is credit card mastery? Have I achieved it? It turns out that this term exists. I did not invent it as I thought I had. There is actually a course called Credit Card Mastery that costs $97. Much of it seems similar to my own system. Although I have not taken that course, it looks very comprehensive. This is an introduction to the course and an explanation of it by founder, Brian Cain.
Based upon my understanding and goals to achieve Credit Card Mastery, I believe that I am on my way but I have not achieved mastery yet. When will I achieve it? There are several requirements that I have established for myself:
• My credit scores average will be over 800 again. It is only about 10-20 points from that now.
• My monthly rotation system will have proven itself to work and I will have a sense of mastery in my credit card world
• My Credit Card Management Chart will be complete and committed to memory. As a result, I will have a firm grasp on all my cards and a natural flow for their use in rotation as needed.
Conclusion
To many people, understanding credit scores and reading credit reports are overwhelming and confusing. There is no need to not have transparency and clarity about your credit cards world. Credit cards are an important tool and can even be crucial for personal survival and business development. Study the resources provided. Take the Credit Card Mastery Course if you can. Having one’s finances in order and being able to live solvently in a credit card world are not luxuries. They are necessities and everyone deserves to have them.
The Cool Piggy Bank property of The WalletHacks.com and the cover image of their facebook page
I am The Credit Card Maven. I have learned ways to use credit cards for survival and profit. This post is designed to share these techniques with my friends and followers.
I started using charge cards many years ago. I never abused them. The bills were always paid on time. But they were not credit cards. They were charge cards for department stores. At one point, I decided to eliminate most of them.
The Credit Score Scale from Shutter Stock®
Credit Cards Replace Charge Cards
My FICO score has always been in the excellent range. In spite of that, I had no idea how FICO scores worked. It was just one of those mysteries of life. I continued to carry a limited number of cards as well as having a credit score of over 800. When our financial situation changed in 2008, credit cards took on a totally new meaning for us.
Credit Cards Become Currency
Due to circumstances which I detail in my first eBook, The Poor Middle Class Crisis Introduction, our financial profile changed drastically. Our equity was gone as well as our income. We no longer had savings. Suddenly credit cards became a way to earn money and derive other benefits from them, as well.
The biggest incentive to use credit cards as currency was our need to take a trip to Colorado to visit our families. Because of that, I signed up for a total of four travel rewards cards. One of them was the airline travel rewards card. I signed up during a promotion. If I spent $1,000 in three months using this card, I would get 30,000 bonus points and $100. off the airfare. I have earned enough points for a free trip to Colorado and back, again. Hopefully it won’t take six years to see our families again.
The Gold Delta SkyMiles® Credit Card Offer from Creditcards.offers.com
Mastering Credit Card Use
As you can imagine, using so many cards can become very confusing. I am still perfecting my system. But I can tell you what I have learned so far. We are fortunate enough to have excellent credit. So we were easily able to secure all the cards we wanted. If you don’t have great credit, do everything you can to improve it. There is a link to an article from NextAdvisor.com in the Sources and Resources section about paying down if not getting out of debt. Do read it.
Treasure An Excellent FICO Score
For the person with excellent credit, you want to keep it. Great credit is precious. Here are some golden rules on how to train yourself to use your credit cards wisely.
• Sign up for cards that best meet you needs and spending habits. There are websites that show you which to use.
• Always pay bills in full and on time.
• Make a chart of closing and payment due dates for all your cards.
• Keep an accounting of how much you spend each month so that you do not exceed your budget.
• Use no more than 30% of the credit limit you have on each card.
• It is better to charge larger amounts on a few cards than to charge small amounts on many cards.
• For cash rewards cards, write on the card itself the cash back % you get on each category of purchases.
• Do not close old credit card accounts. It is best to have as long a credit history as possible.
• Avoid fee based cards unless the benefits greatly outweigh the out-of-pocket expense.
Credit Card Myths and Tips
‘Treat Your Cards Like Your Best Friends’. Man Holding A Credit Card from 123RF.com
Myths about credit cards abound. So here are some tips to dispel them.
• A credit score will not necessarily be lowered by having numerous cards. But don’t sign up for too many too close together. That can appear to the credit card score companies like you are in crisis.
• Almost every credit card company has a ‘Check Your FICO score’ feature. You can use it without negatively impacting your score. This is a ‘soft’ check.
• A ‘hard’ check can negatively impact your score. That could be checking by a loan company, a future employer,etc.
Conclusion
There is so much more that can and will be said about credit cards, their use and mastery in future posts. Credit cards can be like a loaded gun. They can be dangerous, even deadly if you do not know how to use it. On the other hand, they can be a lifesaver when properly trained.
WARNING, using credit cards can be like carrying a loaded gun. At the same time, they can be financially beneficial if you know how to shoot. On the other hand, they can be deadly if you don’t. In fact, many people do end up in debt using them. The interest that accumulates can make it impossible to ever pay them off. Groups that help people get out of debt prohibit their use altogether.
Credit Cards from Linkedin.com
But in my case, using credit cards is part of my financial survival toolkit. With this caveat, I also strongly suggest the following. If you are not able to be vigilant using them by never missing a payment, do not include them in your financial survival toolkit.
How I Make Money Using Credit Cards
Yes, I have actually learned how to accumulate cash or credit towards purchases using my credit cards*. So far, I have discovered two ways to create income. If you know of others, please let me know. I have the following cards:
• a cash rewards card
• a travel points card
* The ‘income’ from them, the cash rewards are not taxable because the money is a discount or purchase rebate, not income itself.
Cash Rewards Credit Cards
Some banks offer credit cards that accumulate cash points for purchases. The points are a percentage of the expense. They range between 1% and 3%. I have been able to earn about $20/month with this system.
The Chase Freedom Unlimited Cash Back Visa
* Mention of this card is in no way an endorsement of it.
Travel Rewards and Sky Miles Credit Cards
I signed up for a travel rewards credit card when the bank had a special promotion. If I charged a certain amount of purchases within three months, I would receive 20,000 in travel points. I did this. The travel points will go towards a trip out of state to see family and friends. Five Star Sky Miles Credit Card
* Mention of this card is in no way an endorsement of it.
Sources & Resources
Here is a list of the best credit cards for a variety of categories. You can explore these websites for even more suggested card categories.
‘Stop and Proceed Slowly’ Sign by ComplianceSigns.com
INTRODUCTION
My Financial Profile
A recent promotional bonus credit card program has allowed me to be very resourceful with credit cards. Even though I live on a fixed monthly stipend that is typical of a retired low income senior, credit card programs have been a benefit for me. This is because of the tools I have learned and benefited from.
I have written at length about the potential benefits from the responsible use of credit cards. Below are the four Ebook I have written about various credit card benefit offers. These minimally priced Ebooks are available on Amazon.
Financial Ebooks I have written that are available on Amazon
A New Credit Card Promotional Bonus Program to Explore
Several months ago, I was able to apply for a new Promotional Bonus Program Credit Card. I applied and was immediately accepted. Much to my surprise, I had the opportunity to apply for several more of them. I was accepted by those as well.
Without blinking, I went from qualifying for one, then four, and even as many as six of these credit cards. Even then, I kept finding more of these offers. Since I did not want to miss out on a single one of them, I kept applying and being accepted.
Capital One Promotional Bonus Credit Card Offer
RULES OF THE PROGRAM
How To Play
At first, I thought the rules were simple. The Promotional Bonus Credit Card program required only that I charge a given amount of purchases ($500 to $1,000) within a three month period of time. As the bonus, I could receive the equivalent of two hundred dollars per card. Since I always charged many of my purchases, I assumed this was going to be an easy win.
Wells Fargo Promotional Bonus Credit Card Offer
VISITING LAS VEGAS
A Grand Total of Ten Cards
By the time I finally got a denial, I was the recipient of ten promotional bonus credit cards. Wow, I was really feeling exuberant. What I didn’t realize was, like a gambler, feeling exuberant would not last. In other words, I was becoming addicted to applying for and acquiring more of these promotional bonus credit cards.
Because I couldn’t stop, things really got out of hand. With each new card, the game I was playing became increasingly complicated as well as much less manageable. It became harder to keep track of all the rules. I kept making charts of when and how charged were due. Even with this extra effort, I still went from feeling high to feeling totally overwhelmed.
Roulette Table of a Casino Stock photo courtesy of istockphoto.com
PROS AND CONS OF THE PROMOTIONAL BONUS PROGRAM
Not As Easy As It Appeared to Be
Given my history of a perfect payment record, I thought this program would work like a charm for me. I was confident that it would be an easy win. But so many complications plagued me along the way. At times, I have questioned my investment savvy even my sanity. I’ve sworn I would never get in over my head like this again.
CREDIT CARD REWARDS, STATEMENT CREDITS, OR GAMBLING
A Bit of Each
Depending on how intensely one dives into this game determines which level of risk one plays this promotional bonus credit card offer. The more one is tempted to use this program as a gambling gambit, the more one is likely to risk.
CONFUSION AND CHAOS SET IN
I Had Definitely Overdosed on This Program
At times I felt very confused, even sleep deprived by the amount of time some of the transactions required. Numerous ‘unk unks’ (unknown unknowns) have taken place. In other words, I had nothing to do with certain things that happened to complicate the process.
Beware the dangers of this credit card program. Like the saying goes, ‘if it seems too good to be true, it probably is’. Sign from CreativeMarket.comBank of America Promotional Bonus Credit Card Offer
A PROMOTIONAL BONUS IS NOT NECESSARILY A CASH REWARD
How Do You Know Which Is which?
In total, I theoretically could net many cash rewards or statement credits. Forms of redemption were unclear. For example, the funds may be held over towards the payment of the next month’s bill. Another scenario was ‘the check is in the mail.’ We all know ‘the check is in the mail’ scenario. In that case, it can take up to several monthly cycles.
Gift Cards
Let’s not forget the gift card option. But is that a gift to me? I didn’t know who it would go to. In conclusion, none of these alternate options was optimal. Given my preference, I like my promotional bonus to be deposited right into my checking account as a cash reward. But that is not always possible. In fact, if the only option is a statement credit, the promotional bonus tool is a guarantee to the credit card company that I will continue to charge in the future to make use of their bonus.
‘Danger Go Slow’ sign from SafetySupplyWarehouse.com
POTENTIAL COMPLICATIONS
A Credit Card Gets Hacked
For example, while I was accumulating bonuses, one of these new cards got hacked. I had to replace it in the middle of my promotional bonus project. In addition, I tried to cancel items that were not refunded but turned into ‘honey points’. Other charges were also counted twice. Even though I did not cause these issues, their occuring caused me to have a severe lack of focus. It became very difficult for me to concentrate on the credit card bonus offers.
The Citi Custom Cash Promotional Bonus Card Offer
MAKE ONE CHANGE AT A TIME
New Tools Can Be Very Tempting To Use Simultaneously
In addition to signing up for these credit card bonus offers, I signed up for autopay. Making two major program changes at one time was a mistake. As a result, some bills got paid twice. It was becoming impossible to keep track of what I was doing.
BEWARE OF TRAVELING IN UNEXPLORED TERRITORY
Use a Reliable Map
Ultimately I realized what was wrong. It was that I had embarked on a new system that was going outside the box of familiar navigation. This new program was twice as hard to maneuver since I was exploring the unknown. Therefore I strongly advise readers to make one change at a time when adding a new element to an existing template.
Bank of America Promotional Bonus Card
NOT QUITE THE CONCLUSION
Is This Calculus or Physics? It Can’t Just Be Bookkeeping
Using credit cards responsibly and profitably is not a strictly arithmetic endeavor. As I discovered with each new profit making tool, their value is equaled by their complexity. Although the original templates are the foundation of this program, with each new component the program goes further outside the original box.
PROMOTIONAL BONUS BAIT
Something Smells Fishy
Along these lines, credit card companies continue to make themselves increasingly tempting to individuals who think they can stay on top of the latest innovations. This requires that individuals stay more than sharp and continue to search for new and existing credit cards. These can improve as investment tools, not just a means of delaying payments on purchases. But they become very challenging to use.
ANOTHER WARNING
This Is Not Bookkeeping 101
As time has gone by, this project has become painfully complicated. What initially seemed like a straightforward giveaway has become a torturous maze of numbers and dates. I participated to see how far I could go outside the box. In other words, I wanted to see how much I could challenge myself. It has been several months with a total of ten new cards. But I am not yet finished with this program. I can hardly wait to be done with it.
This chart illustrates how my credit score was affected by the promotional bonus program. It was 820 before I started and went down to 800 at its lowest. It is rising again since I have almost completed the program.
MY FINANCIAL PROFILE GETS HIT
Effect on My Credit Score
My credit score dropped during this project. The reason is that each credit card application was a ‘hard’ check to my score. But since I have met each charge challenge in a timely manner, my score is rising again and is recovering it’s 800+ scores. Credit score chart courtesy of American Express.
But there is one catch to building an emergency fund with this program. Money has to go out before it can come in. For a while it has seemed that I have lost rather than gained financially.
Warning sign from readers-digest-ca
CASH REWARDS OR CREDIT STATEMENTS
Read the Fine Print to Find Out
Besides the delay, the rewards are often available as statement credits rather than cash rewards. Since my tendency and necessity has been to buy more things, this project has not been a great source of emergency savings. Saving up for them was why I participated originally. Instead, it has also required constant vigilance with each card. Besides that, the amount that I have had to charge is requiring the use of partial payments to stay flush each month. Now I also have to keep track of the deadline on partial payments.
This is a very tricky game requiring numerous greater than rudimentary skills. It feels like the Olympic decathlon competition. In fact, I am now having to use the partial-pay 0% APR feature that comes with these cards. Therefore I am learning something else that is new. But I have been pulled deeper into this maze. I never paid attention to APR percentages in the past, nor did I need to. But now, how many months will I need to use this new tool keeping to the 0%APR?
A FINAL WARNING
Do What I Say, Not What I Did
I do not recommend going to the extremes I have. It has nearly driven me crazy. I may have even permanently burnt out some numerical brain cells besides spending a huge amount of time on this experiment. Has it been worth it?
Sometimes, the way I learn things is by going to extremes. It involves extending the limits of my existing skills to see what new ones I want to gain. Taking little steps would be more prudent. In fact, I suggest taking small, prudent steps for anyone who wants to sign on to this or any cash bonus program.
A set of directional signs from Monexsafetyservices.com
A FINAL WORD ABOUT THIS CREDIT CARD BENEFIT OFFERS PROGRAM
On the Plus Side
One: Paying car insurance in four instead of six payments saving money on installments. Two: Paying home contents insurance in full annually saving about $50 dollars. Three: Paying car registration for the next two years, early, without a pinch, and in full. Four: Being able to afford a healthy diet and avoid illness. Five: Purchasing pleasant necessities rather than feeling very deprived. Six: Occasionally buying something new, even secondhand, but not completely pantry hand-me-downs.
CONCLUSION
The Tip of the Iceberg
As you can see from this blog post, there are many credit card benefit offers. But they have complications that may outweigh their worth. These benefits are like an iceberg. What they appear to offer is actually only the tip of the iceberg of what they can cost.
Were you able to navigate this obstacle course? I’d love to hear your experience. Please share with the rest of us in the comments area. I will report in with my final results as soon as I am done. Right now, I’ve got two cards to go. One is to make a claim. The other is to charge $500 and then make my claim.
Bondi Beach Australia, Bondi Icebergs, Courtesy of Marley Clovelly
‘Account Closed, SYNCHRONY NTWRK’. This is the credit monitoring alert I received on September 23, 2019 from two of my weekly lists for credit card account activity. CreditSesame posted one of them and WalletHub posted the other one. Credit Monitoring Alert from CreditSesame.com
Credit Monitoring Alert from WalletHub.com
WHAT DID AN ACCOUNT CLOSING MEAN?
These and other questions raced through my mind. The only thing that was clear was that one of four Synchrony cobranded credit card accounts were involved. The reason was that the symbol ‘SYNCHRONY NTWK’ was included. Other than that, I did not know which card had been closed. In fact, my biggest concern was not which card it was but how this would affect my credit score.
My concern involved several credit card score factors. First of all, as a result of a credit card closing, I would have less available credit. That could affect my ‘available credit ratio’ credit score factor. I could lose points on my credit score because this ratio is one of six major factors in determining one’s credit score. But let me not get ahead of myself. Before anything else, I had to figure out which card had been closed.
Details of account closing notice from CreditSesame.com
WHAT ACCOUNT HAD BEEN CLOSED?
Since I couldn’t tell from the details provided in the closing notice which card had been closed I had some searching to do. In fact, all that was clear was that it was a Synchrony card. That meant it was a co-branded card. In fact, this was the third time a co-branded card had been closed:
First was my Best Buy card co-branded with CitiBank
The Second was my Lane Bryant card co-branded with TD Bank
And now one of my cards co-branded with Synchrony Cards The Synchrony Network card that was cancelled.
THE SEARCH
I went online. One by one I checked each Synchrony cobranded account. When I came to the ‘Welcome Home’ Synchrony card, I received a response that no such account existed. Right there was my clue.
THE EVIDENCE
To be certain, I called them. Sure enough, their response was that the card had remained inactive for too long. Since I had not used it since February 3, 2017, two and a half years, they were entitled to close it without any written warning or final notice. Actually, they do not have to provide any. Instead, I had been responsible for the account closing. This is because I had not paid attention to the cobranded card closing game.
THE COBRANDED CREDIT CARD CLOSING GAME
Then I remembered that this was exactly what had happened with two of the other times there had been a card closing. A pattern began to emerge with these co-branded cards, USE IT OR LOSE IT!.
In fact, inactivity is the death knell for a co-branded card, because:
These cards are primarily designed for making large purchases to be paid over a long period of time without interest. But, the card company does earn interest when the account can’t be paid on time. In addition, this kind of purchase needs to be made on going to keep the co-branded card alive.
The infographic explanation from WalletHub of ‘Why My Credit Score Changed’.
THE EFFECT ON MY CREDIT SCORE
Fortunately, even though I have had a few closings, my credit score seems to have lost only a few points, if any. As a matter of fact, I still have a credit score of over 800. Besides that, I don’t think the ‘length of time factor’ was hurt either. Lastly, I am relieved to have one less card to worry about. Everything should return to my best score within a month or two. But this account closing reminds me of how ‘high maintenance’ a co-branded credit card can be.
There are Six Primary Credit Card factors in the major FICO® scoring system as illustrated by Credit Karma®
From Credit Karma, How Many Credit Cards Does the Average American Have?
WHAT IS CREDIT CARD CRITICAL MASS?
Credit card critical mass refers to the appropriate number and kinds of credit cards to have. How does one know what kinds to have? How many to have? When enough is enough? Then, when is how many too much, therefore, when is it time to stop collecting more or even cut back? What is the best way to cut back? This blog post will attempt to answer these questions. But keep in mind that the numbers and types of cards will vary depending upon the person, their lifestyle and needs.
COLLECTING CREDIT CARDS
When I started collected credit cards, I went through some very active phases. The reason for these was manifold:
a. building up my credit
b. getting promotional welcome bonuses
c. collecting cash rewards
d. establishing the best cash rewards rates
e. traveling bonuses
A straight flush similarity to an ideal collection of cash reward cards. Image from Dreamline.
THE CASH REWARDS SWEET SPOT
At one point in my credit card collecting, I realized that I had achieved a cash rewards credit card sweet spot. I compare this to a straight flush in the card game of poker. The blog post, A Two-Pronged Credit Card Rating System (Part 2 – June 2019) goes into detail about this. The straight cash rewards flush looks like this collection of credit cards: 6% for US supermarkets
5% for purchases at many cobranded store cards
4% for dining out
3% for gas
2% for health care services and items
1.5% for all purchases
REACHING CRITICAL MASS
In the collecting cards phase, I saw only the small picture. At the time I applied for a card, I found it a necessity. After a few years, I accomplished all of my above goals and then some. Not only did I reach my credit card critical mass but in retrospect, I surpassed it. How did I know that I had done this? That was easy to answer. I knew because the number of cards I had to deal with had become unmanageable.
Store Credit Cards image from rewardscreditcards.org
SURPASSING CRITICAL MASS
As the owner of many credit cards, I was forced to see the big picture and began to ask myself these questions:
a. how many cards did I really need?
b. what categories did I spend the most in?
c. with that in mind, which cards did I use most often?
d. which cards was I leaving dormant?
e. why was I having trouble keeping track of my card purchases when it came time to do my monthly accounting?
f. how could I make things more manageable?
g. when was enough, enough?
h. how could I safely cut back on the number of cards I had?
THE CREDIT CARD CRITICAL MASS FORMULA
Fortunately I found a formula I could use to determine about how many cards to own, which ones to keep and those to phase out since I had surpassed critical mass. These are the factors I now consider in which cards to use:
a. the oldest aged accounts
b. those with the best credit line and lowest credit utilization ratio
c. the ones with optimal returns in my top spending categories
d. those that give me the maximum value for use with my favorite merchants, stores, airlines. or hotels
Credit Card Cash Reward Categories are similar to traffic signals, go, caution, turn at your own risk. This image is from Pixabay.
PHASE OUT RATHER THAN CLOSE CARDS
It is best not to close cards. Instead, let them phase out by letting them be dormant. Make sure that any card that has fees stays open only if it is useful by the above standards. Otherwise, close it to avoid any future fees if it is going to be dormant.
IN CONCLUSION
It is beneficial to have both network and co-branded cards when they have value. But it is wisest not to gather more cards than are really necessary. It can become a real nuisance to have too many cards to care for. On the other hand, it is great to have just enough to be helpful and profitable.
‘Stop and Proceed Slowly’ Sign by ComplianceSigns.com
Wells Fargo Promotional Bonus Credit Card Offer
