I see many articles with a similar title of this article. Let me start by telling you how this article differs from those articles.
- We receive no commissions from credit card companies.
- We assume that you want a credit card with no annual fee.
- We don’t like credit card companies and the debt they often encourage. To a financial planner, credit card debt is like having a cluster of thousands of baby spiders crawling on your body and under your clothes: You cannot act fast enough and there is no amount of modesty worth leaving the situation unresolved.
- We are not interested in points, miles, or any other gimmicks other than cold hard cash back. We want to keep your life simple. Getting cash back is like spending 2-5% less each month.
- We assume that you have an excellent credit score and can qualify for any credit card you apply for.
- While there are people who are taking advantage of credit card company offers to the maximum allowed, this article will only teach you how to do so without requiring ongoing work on your part. Credit card superusers rotate the credit card offers they are taking advantage of over a 2-3 year cycle. This is too much work for me.
- We assume that you will at least do everything in this article. Failure to turn off marketing or missing a payment can ruin all the good that might come as a result of this article.
Before we get to the credit card offers, here are several steps that you should take to protect yourself when you receive a new credit card.
Enter all your credit card information into a secure password vault.
One of the downsides to this technique is that you will have a large number of credit cards. Planning on your wallet begin stolen and trying to remember all your credit cards is something to consider. Make that possibility easier for yourself with careful organization and planning. If you aren’t willing to take these steps you probably shouldn’t have any credit cards.
Whenever you receive a new credit card and set up a login, enter all of the credit card’s information into a secure password vault. I like KeePass, but other password vaults include 1Password, LastPass, Dashlane, or Bitwarden.
In addition to saving the user id and the password, also save the name of the credit card, the credit card number, its expiration date, the security code, and the 24-hour customer service phone number. I organize all of that information into a folder entitled “Wallet”. This would allow me to quickly call all of my credit card numbers if my wallet were stolen.
Turn marketing off whenever you receive a new credit card.
Getting the right credit card for the right reasons is half the battle. Using it correctly is the other half.
When the perfect card arrives in the mail, sign it, activate it, and pull the sticker off the front. However, before you put it in your wallet and start using it, deny the credit card company the permission to market to you.
Dial the 24-hour customer service number on the back of the card. Tell the representative you want the maximum amount of privacy on your account. The credit cards companies have multiple lists in their system. You may find it challenging to turn off each possible marketing opportunity.
Specify that you want no phone calls, statement inserts, or junk mail. Tell them that means no phone calls from third parties, no selling your information, no sweepstakes offers, and no offers of credit protection.
Most importantly, make clear you do not want any access checks. These checks look innocent, but micro print on the back explains that by cashing the check you are accepting the company’s offer to bill subscription charges directly to your credit card.
When you think you have listed every marketing possibility, be sure to ask, “Is there anything else I can turn off?”
None of these offers help you build real wealth, which is why they have to advertise them. You won’t miss anything. We’ve all made the mistake of wasting too much time on a deceptively easy offer that subsequently was very difficult to rescind. Your time is worth more than sifting through the ashes of advertising looking for valuables.
We wrote “Every Three Years, Say No to Advertisers” to show the list of what questions you might ask to see if, after they have said they have turned off everything, they really have.
Notice that they are allowed to return their marketing to its default of allowing them to market to you every three years. This means that you may have to call them and turn off marketing again. I make it a practice to re-ask them to turn off marketing every chance I get even if I have called them for some other reason. This involves asking them to update the date saved for when I have asked them to today’s date. Many will simply see if marketing is turned off, but that is insufficient. You need to ask them specifically to update the date.
Make sure that you pay off your credit card each month.
Putting all your charges on credit cards can be valuable. It can help build credit as you pay them off each month. It can also save you 2-5% as you get your credit card cash rewards. If you slip once though, it can ruin your credit score and erase your savings. Paying by a check that you send through the US Post Office risks your check getting lost in the mail. To ensure that your payment arrives in a timely way, paying your credit card statement online is therefore required.
I set up every card I use to pay the entire amount from my local checking account. Then, I make sure that the checking account always has sufficient assets. This ensures that the credit account is always paid off in a timely manner.
If for some reason you are late paying the bill, pay it as soon as you can, and then call customer service. Explain the reason for the late payment. Then, ask for the interest and late charges to be waived. They normally agree once in a 12-month period.
I spoke with someone who did not pay off their credit card debt every month even though they easily could have. Their negligence was due solely to the effort it took to pay each month. What they did not realize was that when you fail to pay off your credit card each month, subsequent charges all begin accruing interest from the date of purchase. Assuming $3,000 of purchases on their credit card each month, an annual interest rate of 18% meant they were mindlessly adding about $540 to their annual spending simply because they were using a credit card that had a pending balance from the previous month. If you don’t pay off your credit card every month, use our online tool to calculate the incredibly high cost of using your credit card the way you do.
Set the account to notify you whenever anything is charged on the account.
I set an alert to automatically notify me if I make a purchase over $1. This is the best fraud alert that I have found. Any time after using my credit card I will receive an email telling me that I made a purchase. This is quick enough that I have not forgotten about my purchase but delayed enough to remind me what my purchase costs.
I set the bill to come to me via postal mail in order to have a written record of my purchases and also in order to remind me that money will be flowing out of my checking account. This step is admittedly optional since I have also set my entire credit card bill to automatically pay from my checking account each month. You could help save the planet by turning this off, but I like the reminder of what is being charged being delivered in the mail each month.
Use your credit card company to help you resolve any disputes.
Every one of us has felt cheated by being promised more than we actually received. But you may not realize that leverage and the law are on your side if you are willing to take the time to dispute the charge. Wrongdoing thrives when good people do nothing. You can do something.
You can refuse to pay for any charge on your card during a dispute. I’ve only taken the time to fight regarding a few charges on my credit card. It requires lawyer-like patience and an eye for details. Documentation, especially of the portion in dispute, is critical. So is following the rules, which includes putting everything in writing as well as keeping copies for your own records.
Remember that your credit card’s financial institution wants to keep you as a customer. Issuing a charge back is easy for them to do pending the resolution of a conflict.
The merchant’s bank similarly wants to keep the merchant as a customer, but only if their business practices don’t generate time-consuming disputes. They only make money from a seamless volume of transactions.
If you have been wronged by a company regarding a charge that is on your credit card, call your credit card company for help.
Get a credit card in your name only.
I recommend that you get a credit card in your name only. Do not put your spouse on your credit card. Both you and your spouse can, if you want, get separate credit cards. This has several advantages.
First, that means that you are both eligible to receive the Welcome Bonus.
Second, this avoids not knowing who has made a specific purchase. The number of times one member is trying to reconcile the credit card statement and is asking the other person if they charged some amount on such-and-such date can be frustrating. If you don’t remember making the charge, you are then the only person you need to consult with before disputing a charge.
Third, divorce happens. Both parties in a marriage should have great credit. Whoever is listed on a credit card will have the credit associated with that card. Whoever is not listed on any cards may not have any credit. If you are separating, you don’t want your spouse making charges on your card. You also don’t want to mess up your credit card history by removing yourself from your only credit history or trying to make a charge to a card from which you have been removed.
Fourth, you can keep Christmas presents a secret. You don’t want your alerts for charges over $1 to spoil surprises.
If you and your spouse already have a joint card, the card holder who was added to the card can simply apply for the same type of credit card on their own. You don’t need to remove them from the card. Instead, they will be a second signer on the first card and also have a card where they are the only signer. This let’s them keep the credit history you’ve built together, while also granting them all the new welcome bonuses and email-alert-based fraud protection of a new card.
Lift your credit freeze before applying for a credit card.
My wife and I have had our credit frozen for many years. Anytime we need, we temporarily lift the credit freeze, usually for a week or two. This gives us time for someone to get our credit score and then our credit will freeze again. Keeping your credit frozen is one of the best ways to protect your identity.
Before you apply for new credit, remember to temporarily lift the credit freeze on your account.
If you have not implemented a credit freeze, do so after applying for these credit cards.
The Best Credit Cards for 2022
Having warned readers of the dangers and evils of credit cards, here are my recommendations for the credit cards with the most cash back for specific purposes.
Depending on what I am purchasing, I use different cards in order to get the most cash back. This has the added benefit that when these transactions are downloaded into our budget each month, the entire balance can all be categorized the same.
I have specific cards that I use for Amazon, Gasoline, Grocery Store, Eating Out, Streaming Services, and Online Shopping. Each card saves me 3-5% of the purchase price. Then I have a default card for everything else which earns me 2% cash back.
How to get all of these credit cards
You should not apply for all of these credit cards at the same time. Your second or third application may be rejected simply because the credit card companies can’t understand what you are trying to accomplish. Applying for a credit card each quarter is a better strategy. This gives you time to spend sufficient assets with the first card in order to get their welcome rewards before moving on to the next card.
|Credit Card||Purchase Category||Cash Back for Purchase Category||Welcome Reward||Conditions||Our Detailed Review|
|Amazon Rewards Visa Signature
(with a Prime Membership)
& Whole Foods
|5%||$200||Must have Prime membership||Review: Amazon Rewards Visa Signature Credit Card|
|Amazon Rewards Visa Signature
(without a Prime Membership)
& Whole Foods
|3%||$100||Review: Amazon Rewards Visa Signature Credit Card|
|USAA Cashback Rewards Plus American Express||Gasoline||5%||N/A||Must have family member in military or with USAA membership.||Review: USAA Cashback Rewards Plus American Express Credit Card|
|Capital One SavorOne Mastercard||Grocery Store & Eating Out & Streaming||3%||$200||Review: SavorOne Credit Card by Capital One|
|Bank of America Visa||Online Shopping||3%||$200||Must set rewards category.
Must manually redeem rewards.
|Review: Bank of America Credit Card|
|Citi Double Cash Mastercard||General||2%||N/A||Best Credit Card for 2015|
These credit cards won’t change your life, and they shouldn’t, but they can get back a very small portion of the money you spend each month.
Photo by Rann Vijay from Pexels