Your Frugal Friend-Tip Two

Money saving tip #2: Do not pay for anything with a credit card that you couldn't pay for with cash.

Well, that's what we do. That's what my parents did. Mr. Wild's parents did not have a credit card at all until I think we were dating, or even married (this would have been in the early or mid 1990s). So obviously, we come from very cautious credit card users who try to make sure that every month's balance is zero.

What Mr. Wild and I found is that if you use some of those cards with rewards this way, it is like getting free money. We have an Amazon card we pay off every month. For every $2500 in purchases we get a $25 gift certificate for Amazon.com. Since we don't have a balance, and don't carry interest on it, then the $25 is like free money. Those certificates have come in mighty handy at Christmas time. Or on the occasion that we want to pick up something rather expensive. We save up our certificates and then can get something. You can buy lots at Amazon.com. We got our PS2 this way.

We also have one main credit card we use. We try to close other credit card accounts as we decide we don't need more than one. I say no to all the store cards and so forth. They don't really offer anything more special than our Amazon Visa and we really can use Visa everywhere.

If you're carrying a balance on your credit card(s), get that balance down to zero, cancel all cards but one, then use the one as if you're paying with cash. If you're not sure you will have the money to pay it off at the end of the month, then don't go ahead with that purchase until you can be sure you have the money.

I know these are repeats of what you may have heard on TV or read about, but it is absolutely true. Try to treat credit cards as a convenient way to handle your cash. Don't treat them like "credit" cards, because using them for credit is essentially highway robbery. If you are one of those people too tempted for using them as credit, then get rid off all but one and then put it away in your house and try to pay cash always. If you can't stand waiting until you have the money to buy the next new thing, you need to seriously double check your priorities. There is nothing wrong with deferred gratification and it is going to be a really good thing for your kids to learn.