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Debt management

Credit cards are the best thing you can have IF you are responsible and strategize.  My FICO score is 839 so I believe I am able to offer this advice as it has worked extremely well for me.

1.  Only apply for cards that have no annual fee.  You really only need a couple of credit cards.  Do NOT use a debit card for anything except getting cash from an ATM (and only use your bank's ATM's so you will never be charged a fee).

2.  While low interest rate is great, if using them strategically, the interest rate will not matter as you will never carry a balance.

3.  The main thing you want to do is get a card(s) with the best cash back benefits.

4.  Pay all bills possible using your credit card.  Cell phone, vehicle/home insurance, internet, cable, utilities...everything.  Typically you cannot pay your mortgage with a credit card. 

5.  Use your credit card for all transactions you make; restaurants, gas, entertainment, groceries, you name it.  The year end summary is also a great way to see where you spent your money during the year.

6.  I tend to make payments on my credit card(s) every couple of days.  I only charge items I can turn around and pay off that same day.  With that said, it is important to also have some sort of balance at the end of the billing cycle.  However you would pay that balance as soon as your statement is posted/received.  The reason for this is that your credit report needs to show you actually utilize your credit card(s) and the only way this will happen is by having a balance at the end of each statement cycle. 

7.  Now here is the best part!  Every transaction you make with your credit card will earn you cash back.  The cash back benefits vary from card to card, so do your research to find the best one for you.  I personally use my cash back benefits to pay for Christmas.  I let the amounts accumulate throughout the year, and come Christmas time, I typically have around $600 or more that I can use.  

MY Recommended Credit Cards:  If you are someone that uses Amazon a lot, then the Chase Amazon card is excellent!!  You get 5% cash back on all Amazon purchases (this adds up fast at Christmas time), and you get 2% for gas station (includes gas and inside purchases), drugstore and restaurant purchases and then 1% on everything else.  Of course this card also offers no annual fee.

Chase also offers a no annual fee Freedom Unlimited card that provides 1.5% cash back on all purchases.  So I will use this card for everything except Amazon, gas station, drug stores and restaurants.

The above cards are the ones that work best for me, but if you travel a lot for example, you may want to use a card that offers miles.  Again, do your research and find the best options for your situation.  Just make sure there is never an annual fee and you never carry a balance beyond a day or two of your monthly statement being posted.

If you currently have high credit card debt (I did 20 years ago), then you MUST get those paid off and QUICK.  Consider a personal loan to pay them off which will typically be much less interest, OR see about balance transfer offers from credit cards that often give provide  0% interest for some set period of time.  In order to pay off high credit card debt, the key is discipline.  Only make purchases for things you need, and delay your wants for awhile until you get your debt eliminated.  Credit card interest is the worst as it is typically extremely high.  This makes it difficult to pay them off, especially if you only tend to make "minimum payment" amounts each month.  Doing this only leads to a vicious cycle that gets you nowhere close to paying them off.  If you do nothing else, make as large as possible payments on highest interest cards, and then less so on your lowest interest card(s) until you get them paid off.

Being free of credit card debt is the most liberating feeling!!  It's a huge burden off your shoulders.  You can then begin making your cards WORK FOR YOU by never carrying balances and raking in the dough from the cash back offers.

I also have opinions on savings accounts (never put the bulk of your savings at brick and mortar banks such as Chase, Wells Fargo etc.

But I think I have made this plenty long as it is, so I will stop now.  If I'm asked, I can elaborate on this in the future.

"You can't get out of debt while keeping the same lifestyle that got you there" - Dave Ramsey