CREDIT CARDS

Much has been written about credit cards how to use them to maximize the benefits of reward points.  This can be as easy or as complicated as you want to make.  Whether you like it or not, our capitalism has devolved to a point where how you pay for things matters.  As idiotic as it sounds, spend to save.  Here are a few rules to follow:

1.  Pay for everything you can on a credit card.  If your utilities, phone, cable, mortgage/rent, etc. will let you, do it.

2.  Pay off your credit card in full every month.

3.  Select a 'base' card.  This is the go to card This is the one that all of your recurring payments go to.  This is your default to use when your are not trying to exploit some promotional deal.  Look for one that pays around 2% back.  I use a Fidelity Visa.  This card pays 2% into a Fidelity account.  I started out using it to fund my son's 529 account.  When he was through college, I directed it to a Roth IRA.  There are other cards that offer similar deals, but this is a good baseline.

4.  Look for cards offering promotional deals.  All or most cards travel cards will offer a deal to sign up.  These usually include waiving the annual fee for the first year and some number of points or miles.  To qualify, you must spend a certain amount in a certain timeframe.  For example, American Airlines had a deal going where they waived the $95 annual fee and gave you 60,000 miles for opening an account and spending $3,000 in the first three months.  

5.  When taking advantage of a promotional deal, always open an individual account instead of a joint account.  For example, the American deal i mentioned above, my wife and I opened individual accounts and ended u with 120,000 miles instead of 60,000.  

6.  When you have a promotional deal, do what it takes to qualify for the bonus.  

7.  On promotional cards, don't forget to do something about the annual fee.  Call them and either cancel the card or see if they can switch it to a no fee card.  Continually cancelling cards may adversely effect your credit score, so be aware.

8.  You will undoubtedly end up with multiple cards, which can be a pain to keep track of.  If you do have multiples, be aware that some offer different rewards for certain items.  For example, gas cards off a higher reward on gas.  Some cards will run a special where they will give extra reward points for purchase at a certain store or type of business.  You may want to drag out a certain card to take advantage of those deals.  I seldom do this.