This is not a fun topic to tackle, since so many people hate credit and the credit scoring system. But in a recent post on The Simple Dollar, “You need at least two credit cards: Here’s why,” I take on the issue of how many credit cards you should have, and also our love/hate relationship with plastic.
You need at least two forms of payment in case of fraud, robbery or card loss. And no, debit card use is not a good substitute; it puts your personal cash at risk and does not help you build a credit score.
Who cares, you ask? Isn’t cash king? Ideally, maybe: We would all buy only what we could afford and pay cash on the barrelhead instead of running up debts.
But to paraphrase Oscar Wilde, life is never pure and rarely simple. Less-than-ideal things happen all the time.
The post explains what might happen when you lose a card or it gets hacked and you have no other form of payment, and also what could happen to those who use debit only.
It also points out the benefits of rewards credit cards, one of my enduring frugal hacks. Every time I cash in points for a birthday gift (which I recently did), a home improvement project or some kind of entertainment, it reminds me how much I like being rewarded for buying something I was going to buy anyway.
Again, this is a nuanced subject. But my strong feeling about how many credit cards you should have is backed up by real-life experiences (both mine and those of people I know). These explain why it’s not a good idea to rely on a single way to pay.
Car insurance, the two-minute rule and more
A few other freelance pieces that I hope* will interest you:
“Car insurance rates are up – here are eight ways to get yours back down,” at The Simple Dollar. Car insurance rates went up 23 percent between 2011 and 2018. In some states, they jumped as much as 78 percent. But you might be able to affect your rates by using some (or all) of the tactics I list.
“18 two-minute chores to tackle right away,” again at The Simple Dollar: Have you ever convinced yourself that you just don’t have time to fix a money or lifestyle issue? Maybe that’s true. But maybe you can make a difference in your life by implementing the two-minute rule: If something can be done (or at least started) in two minutes or less, get to it. These little things can make a big difference.
Fellow oldsters should check out “7 movie theater chains with great senior discounts,” at Money Talks News. The average movie theater ticket last year cost $9.11. Anyone else find that horrifying? You can save a little, or a lot – and in some places, “senior” means 55 and up.
Finally – and this is pure self-indulgence – here’s a link to a Q&A. TheZebra.com is doing a series of such interviews with personal finance bloggers. This one is mine.
*By which I mean, “When you go read these articles, please consider leaving a comment. It makes the editors think, ‘Wow, that Donna sure engenders great discussions! We should totally double her salary!’” Hey, a girl can dream.
great read! I am going to consider getting an additional credit card
Thanks for your kind words. If/when you do look for a card, may I ask that you use the CardRatings widget on the right side of my home page? Should you choose any kind of card from that site, I’ll get a small finder’s fee.
Or e-mail me at SurvivingAndThriving (at) live (dot) com with the kind(s) of card you’re considering and I’ll point you in the right direction.
I realized when traveling in Europe last fall and my DH lost his wallet that we should carry different credit cards. Carrying the same credit cards meant that all our cards would need to be cancelled, and we’d be left with none to use for the rest of our vacation. Luckily, housekeeping found the wallet, and we didn’t have to cancel the cards. That was a lot easier way to learn the lesson.
Good point! Thanks for sharing it.
I’m going to consider getting a second credit card too. Town in which I live is currently being hard hit by credit card skimmers, which makes me nervous because I use a debit card to pay for gas. The other option I’ve considered is buying a $50 gift card and using it for gas. And reloading it when the balance gets low.
I’ve also implemented your two-minute rule about chores. Should have started years ago.
Way back in the days of lower credit limits, we flew to Chicago and were renting a car to continue our multi-state trip. When renting the car, we discovered that our plane tickets had been charged to our credit card twice due to some forgotten reason.
We were only able to continue our vacation because we had a second credit card.
I only carry one card. I call the fraud department before I go on vacation so no issues with card being frozen. I keep enough cash to get home. Most of my lodging is prepaid before leaving so no problems in 30 years….yet! 🤞
I’ve thought about a second card, but haven’t really wanted to persue it. We put everything on this card and pay it off each month. Only twice had to carry a balance in 36 years. Fortunately husband and I had that conversation Before marriage.
*Getting my Alaska fix following the Iditarod and Finnmarksopet in Norway. It doesn’t bother my dog allergy either!
Interesting. I’m really not into “rewards” cards — to me they seem like a scam to get you to sign up. And I do not like doing business with Visa, especially with Citibank’s Visa, where the customer service is excruciatingly bad. Consequently, when Costco deep-sixed its agreement with American Express (whose customer service IS primo!), I started using my credit union’s debit card there. Hated that, so took to purchasing a Costco cash card once enough, with enough on it to cover one month’s purchases. Everything else is charged on AMEX, which does provide a kickback on purchases, though not as generous as Costco’s.
But note that Costco’s come-ons were not enough to persuade me to go back to CitiGroup Visa. (They could give me the whole darned bank and I wouldn’t go back!) I now carry two credit cards: AMEX for personal charges, and an AMEX business card for my S-corp.
Ooops! Didn’t edit that thing before clicking “post” …purcashing a Costco cash card [delete once enough[] with enough on it… 😀 It’s all the dog’s fault: distracting by barking.
The dog’s fault….? Sure. We can go with that. 😉
I have 4 that I use and love the rewards cycle. I have given up all store cards because the perks are not what they use to be. I love getting 5% back on gas, food, Home Improvements, etc. It is easy money back in my pocket 🙂
I agree with what you said about how nice it is to be rewarded for a purchase that you need to make anyway. I scored three fastfood meals from charging groceries that I needed to buy anyway. I immediately paid the amount in full (I normally pay for groceries in cash but I made an exception and charged my pantry fillers because of the reward points). The three fastfood meals served as my brown bag lunches to work for three days. Yay!
Who says there’s no such thing as a free lunch?
Thanks for reading, and for leaving a comment.