Credit Cards

 

I will admit that right now I do not have much of a financial cushion.  It is a goal for me to build it up and that will come in time.  One of the benefits of no nicotine is the amount of money that I am not spending will help me to build that cushion up.  In the meantime, I am looking at my spending and things I can do to improve how I use my money.  Today, I want to look at my credit cards. 

I currently have three different credit cards.  The fact that I have a credit card at all is miraculous to me because I ruined my credit in my 20s and 30s.  I worked very hard to rebuild my credit by paying things on time and such and it worked.  I knew my credit had improved when, all of a sudden, I began receiving credit card offers in the mail. I went years without any.  Anyway, I have three right now.  One is a general card, one is specifically for my car and the third is specifically for my dental needs. 

The thing I really like about the car and dental cards is that they have helped me to budget well.  They are both issued through Synchrony.  Each charge is interest free for either 6 or 12 months, depending on the card's agreement with the service provider.  If the balance for that charge is not paid off within the specified amount of time, then the interest charge is 24% of the initial charge, not the remaining balance.  While that is pretty steep, it has definitely kept me in line with my payments and I have not had to pay any interest so far.  Now, I only use these cards in emergency and extreme cases.  My radiator cracked and had to be replaced. Card. I had to have restorative laser gum surgery. Card. And it helped me to plan.  I am proud that I could get them paid off because it was thousands of dollars, which may not seem like a lot to most people but when you live on a very modest income, it means a lot!

My general card is Discover.  I love it.  They have been a great credit card company to work with.  I will be the first to admit that when Michael and I were together I did use this card more frequently on things that were not necessities. Luxuries, but not necessities, like a beach vacation for his birthday and too many things from Ebay for myself.  Still, I am proud to say that I have this card for 7 years now and have not missed one payment.  I don't even think I have made a late one yet (knock on wood). But now that I am in a single income household, I am looking at the use of this card differently.  Now I only use it on things that are completely necessary.  Groceries, gas, bills, etc.  And even then, it is only when I don't have enough in my account to cover. That does not happen much, but it does happen when the unexpected expense occurs.  And I do try to pay much more than my minimum payment each month.  Doesn't always happen but I do try!

So, while I have a goal to build up my financial cushion, I also have a goal to maintain my credit and keep it under control while still benefitting from it.  Being a responsible consumer and more financially literate makes me feel like an adult, that I can do this.  And that's a good feeling!