Beatles - "Can't Buy Me Love" (screaming version)
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| From that chapter. Note TS (the cat) to my left. |
Since I published Losing My Religions, I've actually learned a fair amount about finance / money, and realized I have been doing some things wrong for nearly 40 years. (I hinted that there was more to at least dealing with credit cards by mentioning ThePointsGuy.com - also see our new friends at TravelFreely.)
The one thing that is significantly wrong is my suggestion to have only 2-4 credit cards. No! Your credit score is based in part on your credit usage vs your available credit. So if you have a $2k balance total on two credit cards with $5k credit limit each, you have 20% credit usage. Not good! If you had that same $2k balance on five credit cards w/ $5k limits, your credit usage would be only 8%. That's good!
And given that you can use credit card bonuses to Travel Freely or get cash back (and ongoing across categories, as mentioned yesterday) getting a new credit card when super sign-up deals come up is a good idea.
ALSO: Don't cancel your old credit cards! The length of your credit history is also important to your credit score. Anne's oldest line of credit is a department store card she opened a long time ago to get some immediate reward. But by putting it in the drawer instead of canceling it, she has a better credit score today!
Here is a decent video on what makes up your credit score (from someone under 30 with 10+ credit cards); here is NerdWallet's article (takes less time than watching a video, obv).
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