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My wife and I used to spend countless hours trying to figure out which credit card to use for which certain payments just to squeeze out a few extra points.
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My wife and I used to spend countless hours trying to figure out which credit card to use for which certain payments just to squeeze out a few extra points. And looking back, I can tell you exactly how much time we wasted chasing the wrong thing. In this video, I'm going to talk you through about how we started using our credit card, why we got so deep into the points game, how your credit score actually works, and how we use our credit cards to this day.
When we first started out, it was all about the points. We each had our own credit card, and we had built the whole system in our heads how we going to optimize to be able to get the most amount of points as possible. We had one for groceries, we had one for gas, we had one for takeout, for travel, all to optimize with whatever points it could get the most for that current month.
Now look, on paper that sounds smart, but in reality, the amount of time that we were and mental energy that we were using and wasting, quite frankly, on tracking all these different things made the whole point system not even worth it in the first place. We were so deep in optimizing five points here and five points there that we completely lost sight of what the whole point of it was in the first place.
The other thing that we were chasing very early on was our credit score also. And we thought if you use our credit card a certain way on certain categories, that that would be the needle that moves our credit score forward. What we came to understand is that our credit score is made up of a lot more different things than just how we use our credit card.
This includes things like utilization rate, meaning like how much of the available balance that you're actually using with your credit card. It's also important about the different types of credit that you have. This could be like your car loan, a home loan, or a student loan. Also, how long have you had these accounts open?
That last part, that's the thing that really changed everything for us. Time. Being diligent and consistent over a long period of time matters so much more than trying to optimize every single transaction. So here's where we landed, and it's a lot simpler than where we started. We use our credit card for easy and predictable expenses.
This could be like our phone bill, Netflix bill, or a gym membership. We make sure that we pay everything in full at the end of the month. And we're also very intentional what goes on our card in the first place. Quite frankly, the biggest shift for us was being more proactive instead of reactive when it comes to using our credit cards.
When we get paid, we already know where our money's going. We're not sitting there a month later trying to figure out how we're going to cover last month's credit card bill. That's the difference. It's about knowing where your money's is at before you spend it instead of trying to explain it to yourself after the fact.
If you're using credit cards, but you're not totally sure how it's affecting your financial life, or you would like to build a system that's more proactive than reactive, I would love to talk with you. Book a call and let's have a conversation.
This video is for general educational purposes only and is not personalized investment, tax, or legal advice. Every situation is different. Talk with a qualified professional about your circumstances before acting. PLC Wealth Partners is a registered investment adviser. See our disclosures.
