Do Credit Cards Make Finances Simple

by Sandy L on January 21, 2012

I have the ultimate role model when it comes to simplified personal finances.  I often wonder if Babci even has a credit score. She’s always been on a cash only basis.  It wasn’t until I started managing her finances that  she broke down and got  a checking account.  You’re probably going to ask how the heck did she pay her bills without a checking account?  Well, back in the day, she’d walk to the utility company and pay the bill on site.  The gas company was only about 4 blocks from our house, but the other bills we paid at one of those convenience stores that would have bill paying services.  I think the fee was like $0.50 per bill.  Does anyone know if those types of services still exist?

When I graduated from college, my life suddenly got complicated. I had lots of bills to pay every month, including several student loan bills. Without realizing it, I wanted to go back to my simple days where I could count the # of monthly bills on one hand, and so started my twisted obsession with debt reduction.  In addition to that, I had a wonderful negative role model in one of my ex’s regarding credit cards.  He was one of those people who paid the minimum on a bunch of credit cards and his balance never seemed to go down from month to month. It was enough to scare me and I’ve always kept my credit cards to a manageable number of 1.  I had the same citibank credit card for 10 years, but after a few less than ideal customer service experiences, I closed my account and never looked back.

I began my breakup with Citibank by first searching for the best credit card deals.  At the time Capital One had a pretty good cash back card and I said adios Citibank and I’ve been really happy with my card ever since.  Just last week I was literally 16 minutes late paying my credit card bill and when I called to see if there was anything I could do, the customer service rep said she’d waive my late fees since I had just missed the cutoff by minutes.  I was relieved because it was my after Christmas bill which was higher than usual. Needless to say, I’m still happy with my decision 5 years later.

Credit Cards vs Cash

Although Babci still believes cash is king, I like using credit cards for just about everything. I do it for the cash back but I also like it for tracking purposes.  Thankfully, we’re at the point where I don’t have to truly budget anymore. We naturally spend less than we earn, so nowadays, I just like to periodically do a backwards look at my spending to make sure I’m not going out of control in any one area.  I know it may sound strange, but having most of my expenses showing up on one bill is a lot more shocking than paying a bunch of smaller bills.  It really helped motivated me to keep my spending in check.

Questions for the readers..just because I’m curious. How many credit cards do you have and what’s your system?  Have you ever been tempted by those 10% off deals?  Lately, I’ve been tempted by the Target card..they offer 5% cash back on all your target purchases. It seems like an incredible deal, but I wonder if it would make me spend more money than I normally would there. (I mean that’s the whole point by Target’s marketing group isn’t it?)  I also thought it would be good to have a separate card just for home improvements to make tracking expenses for capital gains purposes easier but so far I haven’t.

Despite my strong desire to save a buck, my desire to keep my financial life simple so far outweighed the short term cost savings. I’m sure if I had 27 credit cards, I’d get way more mail and there would also be way more opportunity for me to miss payments and the savings would be offset by late fees.  That’s my theory and I’m sticking to it.

{ 17 comments… read them below or add one }

The Lost Goat January 21, 2012 at 3:47 PM

I have 3 cash back cards because I like to play the maximizing game. I’m not sure how much I would have to earn before I could spend less than it naturally, but I’m sure even joining the 1% wouldn’t cut it for me. Maybe the.001 %, but I wouldn’t bet on even that. So I have to track my spending religiously, daily or nearly every day, and thus I find that the payment method doesn’t matter very much.

If I shopped regularly somewhere I would. For a long time I had a VS card because I bought all my lingere from there. But then I stopped working in office attire and so could wear sports bras every day, so I canceled the card. If I shopped at Target on a regular basis I would definaetly getnthe card because 5% is too good to pass up. But I find Target pricey for groceries and home items and useless for everything else.


eemusings January 21, 2012 at 4:59 PM

I’m definitely all about keeping it simple. I have just the one with my main bank and have looked at others but really, it’s just easier having my main accounts in one place. All cards in NZ have fees, so it’s not really a good deal to have multiple ones. And no, we don’t really get awesome discount deals, so no temptations for me.

My system is, I use it for most everything possible, and pay it off weekly (unless we make a rare large purchase in which case I usually don’t pay that transaction off till the end of the month). I’m pretty conservative.


Sandy H January 21, 2012 at 7:52 PM

We have a few credit cards- discover (we had a 1.9% balance transfer rate). But we use nebraska furniture mart & best buy cards to take advantage of the same as cash promotions. I’ve thought about the target card briefly but I don’t shop much at target- the nice thing is that you can purchase your items then walk to customer care and pay the card off. So if someone was on a cash budget, they could take advantage of the 5% off the transaction, but not go overboard shopping since they could pay it off same day with their cash.


Nicoleandmaggie January 21, 2012 at 8:11 PM

We’re just like you. I prefer having everything on CC if I can. (A few things still come directly from checking.) I like seeing everything on one big statement once a month so I know where the money is going.

I have two CC, DH has two CC. We primarily use our Citicards because they have the best cash back, but every few months will put something on the other cards just to make sure they are still active. I like having the second card because occasionally they’ll cut off access for no reason, like if we’re traveling or if we buy something expensive…or they just screw up.

We don’t have any store cards, just cash back cards.


Linda January 22, 2012 at 10:12 AM

Like you, I prefer to use my cards for most purchases since I can track spending so much easier. Combined with Mint, I can see every transaction within a day or two and make appropriate notes, update categorization, etc. (Now if I could just learn how to use the Budget feature of Mint effectively, everything would be perfect!)

I actually have 3 credit cards now, but I only use 2 on a regular basis. The third is a Visa that I opened up shortly after my divorce with out a lot research; it’s from a small bank and has no fees, but it also doesn’t have any rewards so I’ve stopped using it. I may even close it since I haven’t had it very long and having a rarely used credit card sitting around isn’t a good thing.

The two cards I use are Discover, which I’ve had since 1989 (!) and a Capital One rewards Mastercard. I opened the Capital One card about a year ago in preparation for a trip to Europe. I had read that Capital One did not charge any fees for using their cards in Europe and my Discover card would have been useless there. In addition to not charging any fees for use outside the U.S., I also earn rewards on groceries and gas with this card. It’s only 1%, but I’m happy with that and since I’ve switched my purchasing to using this card for all groceries and gas I’ve earned over $100 in about a year.

My Discover provides cash back rewards, too, and I also regularly sign up for their 5% bonus periods. If I’m doing online shopping, I’ll also check to see if there are any special rewards to connect through Discover or Capital One first; sometimes they offer up 10% cash back bonuses for just a few extra clicks. Because of this feature and rewards earned over the past year, my last few purchases of clothing and winter boots from Lands’ End didn’t cost anything from my budget. 🙂

I’m not tempted by store cards. I get enough junk mail, thank you very much. And I don’t want to carry a fat wallet, either.


Jacq January 22, 2012 at 12:32 PM

Just got my first cash back card in December through my bank – the return is only 2% but because it’s linked in with my bank account, I don’t mind leaving some money on the table for the simplicity. I still have my regular visa (through same bank) and that’s what my regular bills get charged to. Not many of those. The day to day spending goes on the cash back card. After only a month of use, I got more than $70 back in January! (I know, it looks like I spent a lot, but paid for a cruise for myself and a friend and they paid me back in cash).
At a guess, I spend less than $20/week in cash. Never use my debit card either.


shanendoah@ the dog ate my wallet January 22, 2012 at 5:03 PM

I think you’d be appalled by the number of credit cards I have. Honestly, I am not even certain how many are still open. I have 3 that get used- one that used to have a 5.9%APR (supposedly for life, but I can’t complain about 7 years), that still has my Netflix charged to it every month, an Amazon card for all purchases from Amazon, and a Citi card that had a 0% APR through December- no idea what it is now, that gets used most since it has the best rewards program. I don’t carry a balance on any of them.
I also have a card through our CU that has a 6.9% APR in case we ever have anything that can’t be paid off within 30 days . We have yet to charge anything on that.
And there’s a Discover card for when we go to Canada/out of country because it has the lowest foreign transaction fees.
I think we also have a GM card. There might still be a Target card, Sears card, Penny’s card, etc. Some have closed due to inactivity, which is fine with me.

I have a worksheet in my excel budget workbook that used to track all of the cards when we carried balances. But now, it’s just the three, and I know when they are used. I should move the Netflix account to the Citi card though, and cut one out.


Don January 23, 2012 at 12:39 PM

I’m with you on this one! In fact I almost mirror you!

I only had one credit card in college and for a period afterward. Once the reward cards came out, I jumped ship and got a GM Card. I like to keep it simple (it works best for me), so I still only have a few reward credit cards. I also had issues with citi recently, and I think there customer service is even getting worse!!!

As much as I admire Babci’s financial sense, I totally enjoy my reward credit cards, when I use them wisely (which so far I have done).


laura January 24, 2012 at 2:37 PM

We have one joint Amex cash back card and one joint (back up) visa card.
Hubby uses the Amex for all his work expenses, I’ll use it when I book us a vacation. Most of the time we use cash and debit cards.


Molly (Mike and Molly's House) January 25, 2012 at 9:54 AM

I think Mike and I are one of the few that won’t go to a credit card for ‘rewards’. At one point we had 5 credit cards that were almost maxed out (over $70,000). I was besties with all the customer reps. I flipped and pushed and moved our debt all over to try and save on interest. They loved us because they were making money from us but consistently from Capital One to Bank of America to Chase I would run into problems that THEY created. Weather is was a charge for something we didn’t buy or a late charge for a bill that wasn’t late I got feed up. Once our cards were paid off I researched the kind of card I really wanted and found it. We now have 1 credit card with $10,000 credit line that we pay off every month. It’s not the best interest rate at 9.9% but it’s fair. If we are late (which we’ve never been so far) they are very loose with the late fee. When I call a customer rep they are in my city or the one next to us. The card is funded by our local bank by the investors and depositor of the bank. The big banks do not give them money. The rewards are small- after two years we’ve earned enough points for a plane ticket anywhere in the US. It’s worth it!


growingmygirls January 25, 2012 at 6:42 PM

We too have one card that earns frequent flyer miles for Southwest Airlines — am not in love with Chase, the administering bank, but can live with them. I am in love with the airlines and these days, it’s the only way we’re going to travel. I also like the simplicity of one card, which we pay off every month. It’s nice to hear about other companies being tolerant if you are late (did that once and got messed up, but only once), and I just haven’t taken the time to wrap my head around cash-back, which maybe I should. But I’m afraid that if we didn’t get the ff miles, the extra cash or whatever would just get swallowed up into our gaping budget and I’d never travel anywhere. How’s that for financial logic?

We used to have a different VISA that earned generic miles and they changed the deal, so we left them, and long ago, Amex starting putting items I didn’t ask for on my bill. When I called them to ask about it, they said they put them on as a value-added item for me as a customer, which apparently was in the fine print. One thing was a travel-agents book, at $60, that listed all current flights for the year! Probably out of date within a month. When I terminated the card, the rep yelled at me and told me it was all my fault. NEVER dealing with them ever, ever again.


retirebyforty January 26, 2012 at 1:08 PM

I have 2 credit cards that I use regularly. We probably use 50% cash and 50% credit. I would like to reduce the credit card usage further. I tend to spend more with the credit card. I like cash, it’s simple, but credit card is very convenient.


Gill in Canada January 27, 2012 at 7:27 AM

I have one credit card a Mastercard that gives me points that I can use in my local grocery store for free groceries and in the summer when they have their garden centre open, free items from there.

We pay off our balance at the end of each billing period. We taught our two children the same and dd paid for a lot of things for her wedding using the credit card and getting hundreds and hundreds of dollars worth of groceries for free in the process.

I don’t need any more credit cards, as I am happy with the one I have.

Good question though,

Gill in Canada


101 Centavos January 28, 2012 at 8:40 AM

I don’t like credit cards much, a main reason being is that I don’t want another paper trail to keep track of. We have one from USAA at a reasonably low rate, and use it occasionally.


Invest It Wisely January 28, 2012 at 6:47 PM

I am sometimes tempted by those deals, but the truth is that I just have enough cards to deal with already, and I don’t usually go to those places often enough to want to bother with an additional card.


Shawanda January 30, 2012 at 6:13 PM

I have 4 credit cards:

1) American Express Hilton Honors – For hotel points and online purchases since I’ve memorized the card number, expiration date, etc.

2) Amazon Visa – Because Amazon is awesome, I want to have its babies, and I want to be rewarded for all the crap I buy from the company.

3) Target – Not to be a bad influence, but the 5% discount on all purchases is pretty sweet.

4) Bank of America Master Card – Because it’s my oldest credit account and the one with the highest limit. On the rare occasion I actually apply for credit, I want to get the best terms and the best rates. And I believe this piece of trash helps me achieve that objective. I know some people claim closing old accounts doesn’t affect your FICO score, but I’ll err on the side of caution.

I believe using credit cards or debit cards make it easier to track my spending and manage my money, but largely because all of these accounts are linked to


Thomas - Ways to Invest Money January 31, 2012 at 11:52 AM

I currently have only one credit card that I use to pay things that I know I will pay off at the end of the month and it is on auto payment for the exact amount of the bills plus some. I usually only carry the debit card and that one credit card. Though credit cards make it someone what easy it does mean being able to go a little over when you shouldn’t. I like cash for that reason simply because you take out no more than you want or plan to spend and then when its gone its gone. I do the the tracking for cards though.


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