Quote:And don't forget... it's a system designed to help make decisions on giving you more debt.

 

It's not a statement of how good you are with money.

 

It's designed to determine whether or not you're likely to pay them back, and if you can handle more debt in addition to what you already owe.

 

Once you get yourself to a place where you don't need loans (even for 3-6 month "free" financing for things like tires, etc.), then put away 4-6 months of expenses in savings.  Live like that, and save for future purchases (car, roof, AC, etc...) and there's no more need for credit cards or to borrow to pay for anything.

 

Absolutely.  I've personally reached a point in my life where I don't have much debt.  I actually still use my credit card to make more money.  I use it for pretty much all of our day-to-day expenses as well as for some bigger purchases because I get "cash back" from it.  All of that goes into my Roth IRA since I pay the statement balance every month.

 

I maintain a separate Money Market account as my "escrow" account to pay for my property taxes and home owner's insurance every year along with a few other annual expenses (auto insurance, boat insurance, etc.).

 

I maintain and carry "debt" as seen on my credit report because I pay my statement balance on my credit card each month rather than the entire balance.

 

Finally, I maintain another Money Market account (savings) that has enough to cover our expenses for more than 6 months plus it's where we pull funds for vacations, gifts, etc.  I could almost say that I pretty much "pay cash for everything", but most of it is funneled through my "cash back" credit card which in turn puts money into my retirement account.

 

My only regret is not starting this system earlier in my life.

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