Day 11: How A LearnVester Spends…
Posted by LearnVest on March 1, 2010 at 1:28 PM
Don’t gasp too loudly: We want you to use your credit card for all your charges. Wait for it: ONLY (!) if you are a responsible spender.
If you’re a dangerous spender and don’t feel in control of your urge to buy, then spend in cash and work toward controlling yourself. Otherwise, purchase everything on ONE credit card. Here’s why:
- It’ll track all your purchases. At end of the month, you’ll see where you spent your money. If you spend crazily at bars, you’ll see it clearly and will know to chill on the cocktails, lady!
- Insurance. If you make a big purchase (aka, electronics) with a credit card and then it breaks, your credit card has built-in insurance that’ll help you get your money back.
- You can dispute charges. If, say, a waiter overcharged you for tip at a restaurant or the moving company didn’t ever show up, you can dispute that.
- Everything you spend should be earning you rewards points or cash back. We love rewards!
- All of your spending on only one bill is true simplicity! You only have to worry about one payment date too.
- And now, note that all spending should be in line with the budget you made earlier this week
Look in your pretty wallet right now. Ideally, you’d have one debit card, one credit card that you use always, a bunch of frequent visitor discount cards for drugstores (CVS,
Duane Reade, etc.), movie theaters, etc. Plus, you’d have one emergency credit card that you’d leave AT HOME in case you lose your wallet.
Action Time: 1 minute
Choose your favorite card and decide to use it for all your spending. Ideally, this would also be the card you’ve had open the longest. Your favorite card should have (1) a low APR; (2) grace periods; (3) NO fees; (4) great perks like cash back or rewards points.
Action Time: 2 minutes
Choose one emergency card. You can’t cancel more than one card per year, or you’ll mess up your credit score (more coming on this topic in future days!). We also don’t want you to cancel your oldest card, because that also helps your credit score a lot. If you don’t love your oldest card, then make that one your emergency card.
Action Time: 2 minutes Choose just one card to cancel today (not your oldest one!). When you cancel it, make sure there is a balance of zero, and then cut it up.
Action Time: 4 minutes
Attach post-it notes to the back of your other cards. On
the notes, write the date you’ll cancel each. Remember, only one card per year. Write those “remember-to-cancel” dates in your calendar and set a reminder.
Action Time: 5 minutes
Throw all those cards-to-cancel in your nightstand and don’t use them again. Every year, cancel one.
Action Time: 2 minutes
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