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Personal Finances / Credit Cards and Consumer Debt


Subject:  Zero Balance Date:  6/20/2000  12:50 PM
Author:  Mike65535 Number:  36956 of 312777

I'm new to the Fool and have been scanning old posts here and having found no mention and at the risk of preaching to converted...

In my efforts to eliminate CC debt (~11K) but not wanting to give up the convenience of CCs, I maintain one CC with a zero balance all the time (paid in full every month).

To this card I charge all the must-have-CC automatic-monthlies (like Internet access, EZ-Pass highway toll system) and all on-line purchases (books, etc.). I charge any toys I "need" and all Christmas gifts to it. It can "hurt" sometimes, but I have managed to not pay interest on this account except for one month in the past five years.

My rationalizing for doing this is two-fold.
1) In the short-term, it avoids my paying interest on these monthly nickel-and-dimes because the CC has no balance. Nothing iritates me more than having some small monthly fee (like my $9.95 ISP) posted to an account with a balance - this forces me to pay interest on it!
2) For the long term, I have an account that I treat as a charge (not credit) card. I hope that the diligence will still work for me when the other debt is gone.

The only drawback I envision is if the CC company gets tired of me (because I pay them no interest). I know they make money off of me and I don't feel sorry for them; I usually charge ~$200-$300 a month on it.

I also get to do a small, REALLY small, dance every month when I pay it in full, knowing I haven't added to the "other" debt.

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