Joy Of Not Paying Credit Cards Any Interest

photo credit: sovietmole

Not Paying Credit Cards Any Interest Fees

Today, I’m going to continue with a bit of my personal finance area.  I already first mentioned about our duty to learn about personal finance in an earlier post.  I’m still astounded why so many people get into trouble with their credit cards.  They end up in massive debt which gets worse and worse each month.  So to help those folks out, I’m going to share my golden rule, which enables me to have the joy of not paying credit cards any interest fees whatsoever.

Convenience Advantages Of Using Credit Cards

First of all, I view my credit cards as convenient financial instruments rather than funding sources.   I absolutely HATE carrying cash around.  I especially hate getting coins back in change.  So that’s one major reason why I try to put all my purchases on my Visa, Mastercard or American Express.  This way, I don’t have to carry much cash around and I don’t need to accumulate those annoying coins.

Unlike many people, I also do not see my credit cards as funding sources for major purchases.   I see them as interest free, 30-day loans, which is another one of the nice advantages of using credit cards.  I don’t go beyond the 30 days so this way, I never depend on these companies funding any of my purchases, large or small.  This brings me to my golden rule when using credit cards.

My Golden Rule When Using Credit Cards

My golden rule dictates that;

I NEVER purchase anything if I don’t have the actual cash on hand in my bank account already.

If I really can’t pay for the item or service with cash that I have, then I won’t make the purchase.   I’ll delay any large purchase until I have enough cash to actually pay for it.  Remember, my credit accounts are not viewed as funding sources.

Since all my purchases are more or less secured with cash already in the bank, I make sure that I pay the FULL balances each and every month no matter how large they are.  This is how I end up not paying credit cards any interest charges, ever.

I’ve paid my full balances each month since my very first Visa card back in about 1983 when I first graduated from university.  Actually, I was charged a bit of interest for being late on a payment one time but this was only because I got my monthly statement late due to a postal strike.  I ended up complaining to the credit card company and they reversed the interest charge seeing that I was a good customer.

So my record is still clean without ever having to pay those ridiculous double-digit interest fees.  So the two main points here are;

1) Never use your credit card unless you have the cash

2) Always pay off the full monthly balances

If you adopt this golden rule of never putting anything on your credit card unless you know you actually have enough cash to pay it off in 30 days, you will also enjoy not paying credit cards any interest as well as capitalize on the nice advantages of using credit cards including their convenience and perks such as airline points.

If you have any stories to share around credit cards, please feel free to do so below in the comments section.