{"id":230,"date":"2020-07-04T16:40:46","date_gmt":"2020-07-04T16:40:46","guid":{"rendered":"https:\/\/www.solowealth.com\/blog\/?p=230"},"modified":"2020-10-01T02:25:50","modified_gmt":"2020-10-01T02:25:50","slug":"the-solowealth-strategy-that-will-make-credit-card-companies-hate-us","status":"publish","type":"post","link":"https:\/\/www.solowealth.com\/blog\/the-solowealth-strategy-that-will-make-credit-card-companies-hate-us\/","title":{"rendered":"How I Use My Credit Card With NO Credit Card Debt!"},"content":{"rendered":"\n<p>Americans have recently racked up nearly <a rel=\"noreferrer noopener\" href=\"https:\/\/www.npr.org\/2020\/02\/13\/805760560\/u-s-credit-card-debt-hits-all-time-high-and-overdue-payments-rise-for-young-peop#:~:text=Americans%20owe%20nearly%20%241%20trillion,rising%2C%20especially%20among%20young%20people.\" target=\"_blank\"><span class=\"has-inline-color has-vivid-green-cyan-color\">$1 trillion in credit card debt <\/span><\/a>and that&#8217;s an all-time record high! Of greater concern is that delinquencies or overdue payments are rising, especially among the young. In fact, up to <a href=\"https:\/\/www.cnbc.com\/2020\/05\/04\/almost-half-of-america-now-carrying-credit-card-debt-and-more-of-it.html#:~:text=47%25%20of%20Americans%20are%20carrying,a%20survey%20from%20CreditCards.com.&amp;text=Up%20to%2040%25%20of%20Americans,directly%20from%20credit%20card%20companies.\"><span class=\"has-inline-color has-vivid-green-cyan-color\">40% of Americans can\u2019t pay more than the minimum<\/span><\/a>, carrying a balance that results in thousands of dollars flushed down the toilet each year in interest.<\/p>\n\n\n\n<p>It&#8217;s time we recognize the trap of easy access to money in the form of credit, which <strong>allows us to spend more than we earn<\/strong>. In return for this debt, you receive rewards points that don&#8217;t even come close in value to the amount you would pay in interest charges. It&#8217;s important to understand 2 things about credit cards:<\/p>\n\n\n\n<ul><li>Besides a convenient way to pay for things, credit cards are nothing more than CREDIT BUILDING &amp; CREDIT MAINTAINING tools.<\/li><li>The only money you have available to spend is the CASH in your bank account.<\/li><\/ul>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2>How to Use Your Credit Card Without Racking Up Debt:<\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img src=\"https:\/\/www.solowealth.com\/ca\/blog\/wp-content\/uploads\/2020\/07\/Untitled-design-1-699x480.png\" alt=\"This image has an empty alt attribute; its file name is Untitled-design-1-699x480.png\"\/><\/figure>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4>1. Determine how much you can spend on your credit card, so you can pay your credit card bill IN FULL every month:<\/h4>\n\n\n\n<p><strong>Example<\/strong>: Assume you can set aside a $2000 monthly cash spending allowance to pay your credit card bill IN FULL every month.<\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4>2. Determine the credit card balance at which you would stop using your credit card, so that you only have a small balance owing each month:<\/h4>\n\n\n\n<p><strong>Example<\/strong>: Assume your credit card has a $10,000 credit limit and you want no more than a $500 balance owing every month. Remember, you need to show card &#8216;activity&#8217; to help build your credit score. Therefore, you would stop using your credit card when you have a $9500 credit limit remaining.<\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4>3. Overpay your credit card by an amount that meets your spending allowance determined in Step 1, while leaving you with a balance owing determined in Step 2.<\/h4>\n\n\n\n<p><strong>Example<\/strong>: You can afford a cash spending allowance of $2000 and you&#8217;re comfortable with a balance owing of $500 every month. This means you would overpay your $10,000 credit limit card by $1500 every month , so that you end up with an $11,500 credit limit. If you spend $2000 on your card, when the bill arrives you would only have a $500 balance owing.<\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4>4. You may be wondering: &#8220;Why do I have to overpay my credit card? Why can&#8217;t I just use my available credit, up to my cash spending allowance?&#8221;<\/h4>\n\n\n\n<p><strong>Example<\/strong>: For the same $10,000 credit card, assume you charge $2,000 in expenses, so that you stop using your card when you reach a credit limit of $8000. As it often occurs, what if you&#8217;re tempted to tap into your $2,000 cash allowance that you set aside to pay your credit card bill? Now you&#8217;ve used up your cash allowance and dread the $2,000 credit card bill that&#8217;s about to arrive. By overpaying your credit card, you have some financial leeway before you end up with a balance owing.<\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4>5. The benefits of this strategy include:<\/h4>\n\n\n\n<ul><li>You never have credit card debt owing by managing to make payments IN FULL every month.<\/li><li>You increase your credit score by showing &#8216;positive credit card activity&#8217; with low use of credit [credit utilization ratio].<\/li><li>You still get the rewards points simply by using your credit card.<\/li><\/ul>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>The solowealth strategy to use your credit card without racking up debt is <strong>one of the best credit card hacks you will ever learn<\/strong>. Apply it and pass the knowledge down to your kids for a debt-free future.<\/p>\n\n\n\n<p>You know <strong>you need a credit card to build credit<\/strong>, but if you&#8217;re having difficulty getting approved, no problem! Simply start by applying for a secured credit card such as the <strong><a rel=\"noreferrer noopener\" href=\"https:\/\/www.creditbuildercard.com\/solowealth.html\" target=\"_blank\"><span class=\"has-inline-color has-vivid-green-cyan-color\">Credit Builder Card<\/span><\/a><\/strong>. Once you&#8217;ve built enough credit, you can apply for a credit card of your choice, but remember what you learned above to avoid getting into credit card debt &#8211; forever!<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><a href=\"https:\/\/www.creditbuildercard.com\/solowealth.html\"><img width=\"300\" height=\"250\" src=\"https:\/\/www.solowealth.com\/blog\/wp-content\/uploads\/2020\/07\/credit-builder-card.png\" alt=\"\" class=\"wp-image-231\"\/><\/a><\/figure><\/div>\n","protected":false},"excerpt":{"rendered":"Americans have recently racked up nearly $1 trillion in credit card debt and that&#8217;s an all-time record high! Of greater concern is that&#8230;","protected":false},"author":1,"featured_media":232,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[9],"tags":[],"_links":{"self":[{"href":"https:\/\/www.solowealth.com\/blog\/wp-json\/wp\/v2\/posts\/230"}],"collection":[{"href":"https:\/\/www.solowealth.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.solowealth.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.solowealth.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.solowealth.com\/blog\/wp-json\/wp\/v2\/comments?post=230"}],"version-history":[{"count":3,"href":"https:\/\/www.solowealth.com\/blog\/wp-json\/wp\/v2\/posts\/230\/revisions"}],"predecessor-version":[{"id":263,"href":"https:\/\/www.solowealth.com\/blog\/wp-json\/wp\/v2\/posts\/230\/revisions\/263"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.solowealth.com\/blog\/wp-json\/wp\/v2\/media\/232"}],"wp:attachment":[{"href":"https:\/\/www.solowealth.com\/blog\/wp-json\/wp\/v2\/media?parent=230"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.solowealth.com\/blog\/wp-json\/wp\/v2\/categories?post=230"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.solowealth.com\/blog\/wp-json\/wp\/v2\/tags?post=230"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}