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Credit Cards

Credit Cards are tricky. On one hand they are very convenient, but it is that convenience that gets so many people in trouble. Our basic philosophy on Credit Cards is that it takes a disciplined person to use a credit card wisely. If pay interest on your credit card, then you are not using it wisely and should cut it up and get rid of it.

Many people disagree with me on this point. Some say you need a credit to help you build a credit score (how else are you going to buy a car, house, etc.? more on this later). While others say that credit cards are terrible and that cash is king and the only way to pay for things. We can see both sides of the coin and that is why we have the philosophy we have.

Credit cards should not be your backup plan. Credit cards, or any type of credit, should not be used as your emergency fund. We use our credit cards because we like getting the rewards, but we never pay any interest on them.

Bottom Line:

We always pay them off each month before we are charged any interest (yes, you can do this; we have them setup on auto-pay) and we never use them unless we are 100 percent positive that we are within budget and that the funds are already in our bank account.