A Credit Card Rating System Introduction (Series Part 1 – June 2019)

 

A CREDIT CARD RATING SYSTEM

The responsible use of cash reward credit cards has been very helpful in reducing my monthly expenses. In order to help me decide what new credit card I should apply for at any given time, I have developed a credit card rating system. It guides me in determining which credit card will best meet my needs at the time I apply for it. This blog post series will explain my system in detail to help others decide what cards and card qualities to consider as well.

THE CATEGORIES OF CREDIT CARDS

The categories of credit cards are shown in the illustration below. Note that each serves a different purpose. Cash reward credit cards provide a crucial feature that some of us value most, cash back for a reduction in expenses. To apply the system where it has great value, I will use the cash back or cash rewards cards category as the primary focus of this blog post series, A CREDIT CARD RATING SYSTEM.

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“CompareCards says issuers are providing such generous deals, they’re virtually irresistible for those willing to switch.”
CASH BACK AKA CASH REWARDS CREDIT CARDS

With cash back credit cards, one can get reductions in monthly credit card charges. This is crucial for the survival of someone who is a Former Middle-Class Person as well as a senior citizen. In fact, the benefits offered to make life easier with these cards increases almost daily. This is because credit card issuers are becoming increasingly competitive with generous offers to lure new customers to switch credit cards.

ADD TO RATHER THAN SWITCH CARDS

It can be preferable to add a new credit card rather than switch by elimination. On the other hand, there are many details to keep in mind when adding rather than switching. In spite of that, one major benefit of having a bounty of (cash reward) credit cards is a substantial amount of total available credit. This means that if a credit cardholder uses a very small % of his/her total available credit each month, a major factor of one’s credit score remains ‘EXCELLENT’. When it comes to credit scores, most systems use a total of six factors and using a small % of available credit is one of them. But adding new cards definitely has its pluses and minuses. In spite of the challenges, I have found adding cards to be a plus. More about this in the other posts in this series.Here is an article about this from Credit Karma.

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There are Six Primary Credit Card factors in the major FICO® scoring system as illustrated by Credit Karma®
HOW TO KEEP MANY CASH BACK CREDIT CARDS ACTIVE AND IN ORDER
There is no way to use every card each month. As a result, I use a rotation/pairing system that allows me to use only several cards each month. The pairing part means that I make available one card in each of my charging categories, if possible. Even though I have developed a system, I still have to be vigilant. That means staying within my spending budget and making all my payments on time. In other words, there needs to be a way that I can keep track of every detail of every card at all times. More about that in the other posts.

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Credit Card Cash Reward Categories are similar to traffic signals. This one is from Pixabay.
MY CREDIT CARD RATING SYSTEM AS IT IS APPLIED TO CASH BACK CREDIT CARDS

The additional posts in this series will focus on how my credit card rating system relates to how I choose cash rewards credit cards. I can and do use it for deciding on all my accounts. The beauty of this system is that it can be used across the board with any cash reward card. In fact, it can be used for deciding on any type of credit card as well.

SUMMARY

Here are the links to this five part series about my Credit Card Rating System: Introduction to A Credit Card Rating System
The Rating System Used for Cash Back Credit Cards (Series Part 2 – June 2019)
Excellent Cash Reward Cards (Part 3 – June 2019)
Mixed Cash Reward Credit Card Benefits (Part 4 – June 2019)
Risky Cash Reward Credit Cards (Part 5-June 2019)

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 comments and questions at the VERY end of this post. You will have reached the end because you can not scroll down any further. As well, you will have reached the comment form.

SOURCES & RESOURCES

To learn more about credit card cash rewards, go to these blog posts:
Credit Card Categories, Sign Up Incentives and Cash Rewards
How To Compound Cash Rewards
Nerd Wallet | Credit Cards Market Place
The Former Middle Class Ebook Series

The learn more about all kinds of credit cards, go to following link about CompareCards.com (A.) and its sublinks (B. through I.)
A. CompareCards® by Lending Tree
B. Best Credit Card Offers July 2019
C. Low Interest Cards
D. Balance Transfer Cards
E. Cash Back Cards
F. Reward Cards
G. Airline Cards
H. Business Cards
I. No Annual Fee Cards

 

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Mastering The System of Extreme Credit Card Benefits

 
Credit cards took on a whole new purpose after our finances took a nose dive in the not-so-great depression of 2008. Using credit cards became a necessity. Over the years, mastering the system has allowed us to develop extreme credit card benefits.

By 2009, we went from being Middle Class to becoming part of The Former Middle Class as well as One Day From Homeless. The Introduction to my first eBook, The Poor Middle Class Crisis, details what happened to us. As a result we had to find new ways to survive, new ways to make ends meet. We created a financial survival toolkit. One of our most essential money making tools became credit cards,the cash rewards and travel points cards we already had in addition to the numerous new ones we have gotten since then.

extreme credit card benefits
Two published Amazon eBooks and a third on the way in the 3 eBook series about ‘The Former Middle Class’
Our Financial History Over The Last Decade

Mastering the system of extreme credit card benefits can go beyond achieving necessary income for survival. Mastery can provide extreme credit card benefits. Over almost the last decade, we have worked on fine tuning our use of credit cards to achieve mastery of this invaluable financial survival tool. It has allowed us to rise from survival to live a frugal way of life. It even includes what might be viewed as a bit of frivolity.

Mastery starts out as a science. It develops into an art. This became the situation when the need to visit family in Colorado arose. The art of creating extreme travel rewards credit cards benefits came into play. Before that, our focus had been primarily on cash rewards credit card. Needing to find a way to afford our trip, we had to learn to master travel rewards cards.

Earning Credit Card Benefits

The first step in mastering credit cards is learning about them. So that is exactly what I did. I did research locating the best sites and blogs about mastering credit cards. Then I practiced and learned how to do it myself. As part of the process, I created a ‘cheat sheet’ that I could easily refer to. It is called, ‘Tips for Mastering Credit Cards’.

Tips for Mastering Credit Cards

Even though I continue to gather more helpful tips, I think that the ones on this list give me and anyone who reads them a pretty good start. What I would like to do for the rest of this post is go over them and explain any that are not completely transparent already. The details will cover several blog posts because there is so much information to share.

credit cards mastery tips
The List of Tips for Mastering Credit Cards

1. Pay credit card bills in full by the due date and preferably before the report date

The companies that you have credit card and other ‘debt’ with report the amount of that debt to the credit report agencies on a monthly basis. To have them report a $0 debt, pay your balance in full before the reporting date. Your credit card companies are supposed to provide you with that date if you request it. Find out what that date is and keep track of that date as well as the due date and the closing date.

2. Learn to build and maintain excellent credit

There are many resources for learning to build your credit. They are listed at the end of this post. Notice the colored sections in the image below. They indicated credit levels. Excellent credit is the bright green bar.

mastering credit cards
A visual of credit card history as reported monthly by my credit card company.
3. Get credit cards that offer promotional sign up bonuses

Many credit card offers include a promotion of either cash or travel points in addition to the regular cash back % and points that they acru. Be sure to get one with both. In addition, compare offers for the best deal. There are several variables. This includes the promotion, the amount that must be spent to get it, and the regular benefits. The best ‘investment’ I have ever made was a $200 bonus on a $500 required expense. That’s a 40% return. Where else can one get that kind of a deal? This is where mastering skills come into play and why you want to learn mastery.

Mastering credit cards
The Best Offer I Have Ever Gotten on a New Credit Card
4. Get credit cards with exceptional cash or travel points rewards

This card also is one of the best cash back credit card. Note the cashback percentages on this card: 3% restaurants, 3% gas, 1% on the rest. (You can see it on the image about the AARP card info above). Other cards with similar cash back bonuses may offer 3% on some items, 2% on some items and 1% on the rest. I suggest using such a card for the items that only get 1%. What is an alternative? This brings up the tool of credit card pairing.

5. What Is Credit Card Pairing?

There are two formulas offered on cash rewards cards. There are 3%/2%/1% cards. There are straight 1.5% cards. Both have their place. The 3/2/1 cards give 3% cash back for either gas, groceries or restaurants. Then they give 2% for the alternative of restaurants, groceries or food. For example, if gas is the priority, you can use a card that offers 3% for gas and 2% for groceries, like the BankAmericard and the Amex Everyday Blue Cash Rewards cards. If you like to eat out, you can use the AARP card that offers 3% for restaurants as shown in the image below.

AARP credit card percentages

Therefore, if you pair cards, you can get 3% or at least 2% for groceries, restaurants and gas. You can avoids using the 1% feature altogether. That is because cards like the Capital One Quicksilver Card pays 1.5% across the board for other expenses. Since pairing requires carrying more than one card at a time, you will needs a tool to remember which card pays what percent of cash back.

6. Remembering What Cards to Pair

I had thought of this tool but did not start using it until I read about it in a blog post by Jim Wang of Wallet Hacks. He actually mentioned writing the cash reward percentages directly on the credit cards in something like waterproof magic markers. It works great.

As I think of them, I will write about more extreme cash rewards benefits. Be on the lookout for future posts on this topic. There is also an (upcoming) Amazon eBook entitled, Mastering the System of Extreme Credit card benefits. As mentioned at the beginning of this blog post, two other Amazon eBooks on this topic are currently available. They are:

The Poor Middle Class Crisis and Using Credit Cards for Survival & Profit.

The third will be available on Amazon shortly:
Mastering the System of Extreme Credit Card Benefits

Extreme Credit Card Benefits
Mastering the System of Extreme Credit Card Benefits eBook Cover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conclusion

The responsible and potentially profitable use of credit cards requires one fundamental rule. All credit card statements must be paid in full and on time. There are no shortcuts, no magic tricks or hidden agendas. All of the suggestions, tips and tools mentioned in these posts are totally above board and follow standard credit card use guidelines even when creative techniques or combinations are applied. Study these tools, practice these tips, learn these applications so that you can have the opportunity to experience extreme credit card benefits, too.
 

Sources and Resources

Wallet Hacks
NerdWallet
CreditCards.com
Next Advisor
Wise Bread
The Frugal CrediTnista
The Penny Hoarder
Credit Karma
Credit Sesame
 

Helpful Facebook Pages and Groups

Survival Comes First
A Savvy Saving Survivalist
Savvy Saving Survivalism
Credit Card Swag
The Credit Card Maven
The Poor Middle Class Crisis eBook
Using Credit Cards for Survival & Profit
Mastering The System of Extreme Credit Card Benefits

 
Please note that I have not received any compensation for mentioning or promoting specific credit cards.

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