Sunday, June 27, 2010

Just a little note about the CC challenge

I think I need to make a few clarifications. Almost 5 years ago, we paid off all of our debt and only had 1 car payment to make. We now have our mortgage and 1 car payment to make. When I say, "in the hole," I mean that from the saver's perspective. Meaning, I want to pad our savings' account, increase our college savings for the kids, increase our retirement savings, and have money leftover for little splurges/trips.
After we paid off our debt, we began to use our CC as a way to earn points and paid the balance off monthly. Now, I want to compare the two ways. Is it more advantageous to use the CC and pay it off monthly or does one unknowingly spend more just because it's available (even though it gets paid off)? Or is it better to spend only what is immediately available in the account? If one goes by the latter and uses automatic savings programs (where certain amounts are debited from your checking account and placed into a savings account automatically), I wonder if one could come out ahead this way? I am going to find out for myself this year.
So, needless to say, we are good savers and have what I like to call "traditional" debt (mortgage/car), but can we do better? Can we save more and still live a comfortable lifestyle?
If you are using CCs and paying them off monthly or if you live by cash alone, leave me a comment and tell me why you think it works for you. I am curious as to how everyone does this.

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